A 10 per cent corporation tax on e-Gaming companies should be introduced to help the nation’s finances.
That’s the view of Isle of Man Municipal Association chairman David Talbot who said it should be considered before a toilet tax.
In a letter to the Isle of Man Examiner this week he describes the proposed sewerage charge as causing ‘understandable outrage’, hitting the rich and vulnerable alike.
‘As we keep being reminded by our politicians, things have to change or we will have to countenance a reduction in frontline services,’ he said.
‘If things are as bad as we are being told, we have now reached the stage where we have to take a less precious attitude towards business and find a way of reintroducing corporate taxation.’
He said: ‘I would firstly extend the 10 per cent charge to the e-Gaming sector, which on a worldwide basis has millions of pounds’ worth of turnover. If we saw only a small fraction of that in taxation from our resident e-Gaming companies, it would make a considerable difference to our fortunes.’
Discussion would be essential, e-Gaming companies should be presented with the same mantra that ‘we are in this together’, and its introduction could be phased over a five-year period.
‘Before anyone jumps to their feet saying this will result in an overnight exodus of the e-Gaming businesses, I would remind you that one of the MDs [managing directors] of a local e-Gaming company said, on camera, that he wouldn’t object to his business playing its part in re-balancing the nation’s finances,’ he said.
‘Why is our government apparently so scared of opening up discussion in this sector?’
Under zero/10, most companies pay no corporate tax although certain sectors, including banking, pay 10 per cent.
If this was not enough to fill the gap in the island’s finances, Mr Talbot’s next suggestion is to look at reintroducing a corporate tax of 10 per cent on all companies.
‘Going back to the days when zero/10 started, a corporate tax of £250 per company was introduced, which was then added to the annual return charge to save the administration costs of collecting two separate fees,’ he said.
‘Having established this principle of a corporate tax, there is opportunity to increase the annual charge substantially in the mix of collecting an appropriate rate of corporate taxation.
‘Government should sit down with an organisation such as the Chamber of Commerce and have the “we are all in this together” conversation.’
In addition, government should look at the ‘serious under-contribution to the nation’s finances from the large UK retailers who have taken up island residency’, proposing a levy on all retailers trading out of industrial estates.
Based on 50 per cent of their lease payments,when added to the local authority charge, it would still be less than the amount paid by UK stores per square foot in rates.
Mr Talbot said the fundamental issue with the toilet tax was the user pays all approach.
‘What we need to grasp is that, if this mantra of user pays all’ is carried to its logical conclusion, you could be paying for your next hospital treatment, a toll on taking your car onto the public highway, or any other Government service to the public you care to mention.
‘This is clearly a nonsense and is merely a convenient way of passing on central government costs without any noticeable pain being suffered by our politicians, or a significant reduction in the biggest cost, that of the Civil Service.’
He described raising money in this way as ‘ going for the soft underbelly of taxation, that of the rates.’