Details of Budget - Tax to Go Up, Just Under 100 Jobs to be Cut in Government
The budget has been announced and as previously feared tax is set to go up.
An £85 million hole in the budget had to be plugged, so raised taxation seemed like the obvious choice to make back a substantial amount of money.
The income tax standard rate will remain at 10%, however for people in the higher rate of income there will be an increase to 20% - a level that still keeps the Island highly competitive in comparison to the UK.
In an effort to keep the Island an enticing place for new Business Corporate Taxation for Financial Institutions will remain at 10%
99 jobs across Government are going to be cut, it’s thought that this along with an estimated £37.1 million reduction in Government spending will significantly bridge the gap left by the ending of the VAT sharing arrangement with the UK.
Treasury Minister Alan Bell said although raising tax isn’t ideal, it’s something that needed to happen to ensure the long-term stability of the Isle of Man.