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IoM Consultation Launched On PIT Regime Overhaul

by Amanda Banks,, London

14 August 2015

The Isle of Man Government on August 14 launched a new public consultation, Proposed Changes to Individual Taxation, on proposals to further simplify the island's income tax system and lift thousands of the lower-paid taxpayers out of the tax net.

The proposals, first set out in this year's Manx Budget, would see the abolition of the lower 10 percent income tax rate, the effect of which would be counterbalanced by a significant increase in personal allowances, from GBP9,500 (USD14,830) per person to around GBP14,000.

In his Budget speech in February, Treasury Minister Eddie Teare explained that the change would leave the island with a single personal income tax rate of 20 percent. He said: "I will announce the level of the personal allowance for 2016/17 in my Budget speech next year, but my aim is to ensure that as a consequence of this change as many people as possible on low incomes benefit, and I hope revenues will permit me to also ensure that nobody will be worse off."

"It will mean that over 10,000 low-paid people will no longer have a tax liability. It will also significantly simplify the income tax system and reduce the instances where income tax acts as a disincentive to paid employment. This will also enable us to divert resources to ensure that those who should pay do pay."

Launching the consultation, Teare repeated his hope that income tax revenues this year will be sufficient to permit a level of personal allowance high enough to ensure that no-one will pay more tax as a result of the removal of the 10 percent rate. He added that it was still too early to say with any certainty whether or not this will be achieved.

TAGS: Isle of Man | Individual Taxation | tax | law | international financial centres (IFC) | offshore | individual income tax | Tax

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