Isle Of Man Facing Fiscal Challenges

by Jason Gorringe, Tax-News.com, London

26 January 2012

The Isle of Man Chief Minister Allan Bell has issued the strongest warning yet that the island must face up to some difficult changes if it is to overcome the current economic challenges.

In a public message warning of fiscal policy to come, Bell said: “The road ahead will be difficult and some of the decisions we have to take will not be popular or easy to accept. But it is vital that we all face up to these realities and accept change if the Isle of Man is to survive and, indeed, thrive into the future.”

Bell said the government's top priority is to rebalance public finances and deliver further economic growth while protecting the vulnerable.

“Work to rebalance our finances has started across all Departments, with the aim of completion within just over three years," he commented. "This consists mainly of spending reductions to create a leaner government, coupled with the short-term use of reserves and the generation of new income streams, on top of the tax increases that have already been implemented. The government will also work to reduce its annual salary bill, currently standing at well over GBP300m (USD466m), by 10% in real terms over the next three to four years. Achieving this essential reduction will, inevitably, entail job losses and continuing wage restraint."

“My aspiration is to ensure the island as a whole becomes an enterprise zone committed to promoting innovation and entrepreneurialism and I have tasked my Minister for Economic Development, John Shimmin, to deliver this," he continued. "We must clear away impediments to economic growth, ensuring that our policies and processes facilitate rather than inhibit the future prosperity of our island. It is the government’s responsibility to make the overall infrastructure, general environment and its operations more business friendly.”

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