Create health and social welfare fund (ring fenced corporation tax)

Before the VAT adjustment the IOM benefitted handsomely enabling Government to introduce zero/10 company tax, the aim being to attract and retain companies presumably with the hope that they would generate tax revenue via an associated increase in personal income. Government was also able to provide a fully funded NHS and a generous social welfare system (e.g. pension supplement and personal allowance credit for low income families.)

Come the adjustment, Government had little choice but to investigate savings in Government expenditure but, at the same time, the IOM tax strategy should have been looked at particularly the feasibility of the zero/10.

Even as economic growth has risen, a growing number of families are getting poorer in real terms while company executives, shareholders and other beneficiaries of the 28,000 registered companies on the IOM, who may not even live here, are getting richer.

If the same percentage of GDP went towards health and social welfare as the UK and others, around 10%, these vital service on the IOM would be funded to the tune of £450million.

As we are a low tax jurisdiction this obviously cannot be achieved as significant rises in tax rates would not be competitive with other “tax havens” but there will come a day when further cuts and charges will not be socially acceptable and the IOM may have little choice but to raise taxes along with other “tax havens” who are probably in the same boat.

The feasibility of a specific health and social welfare fund could be considered aimed primarily at getting the cooperation of the e-sector which supports relatively few tax paying workers commensurate to their company incomes. This could also apply to the registered companies who support few if any employees.

Why the contribution is important

The IOM cannot continue to expect the less well-off will accept the brunt of the balancing of the books through cuts and unfair charges. There is plenty of scope for richer companies and individuals to offer a fairer share.

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by Nicola2IOMGov on July 18, 2018 at 12:04PM

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Comments

  • Posted by moleInView July 26, 2018 at 11:15

    I totally agree. UK GDP spent on health is near 9.7%,and the IOM,from memory, is about 4.1 %. But most of that spending is on maintaining high senior staff wages,when we are chronically-acutely short of basic nursing staff. They won't stay if you don't treat them right too.It's not just about the pay.Some serious cross Government re-balancing is needed to bring DHSC to a standard of supporting the patients,rather than causing more harm through lack of resources and skills.
  • Posted by ClareIOMGov August 09, 2018 at 13:39

    Consider the level of business tax on the island and whether a small increase could be levied and ring fenced for the health service.

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