The Chief Minister says a wide range of options were discussed by the Council of Ministers before tax rises were included in this year's budget.
In the House of Keys last week he faced questions from Arbory, Castletown and Malew MHK Jason Moorhouse about tax increases.
Mr Cannan said spending cuts had formed part of discussions as well as higher taxes.
But he added Tynwald would be discussing the Island's future tax strategy soon:
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