Treasury Minister Eddie Teare MHK has welcomed further recognition of the role played by competitive tax jurisdictions in supporting economic growth.
As part of the Isle of Man Government’s ongoing programme of engagement with UK business and political leaders, Mr Teare attended a recent CBI/Policy Exchange event in London which launched a major report by the CBI on tax and British business. The report highlights the significant contribution business makes to the UK Exchequer, and the importance of tax competition to economic growth.
In his keynote speech, CBI Director-General John Cridland said:
‘UK businesses need to be competitive on the world stage and are perfectly entitled to operate in low-tax jurisdictions for legitimate business purposes.’
Addressing an audience of business leaders, policy makers, charities and NGOs, Mr Cridland made clear that an important distinction had to be drawn between transparent tax countries and those that hide behind secrecy.
Mr Teare said:
‘It was interesting to hear Mr Cridland’s views about competitive corporate tax systems and how they can stimulate investment and secure long-term growth. The Isle of Man has a simple taxation regime for local and international businesses, and as a nation we make a valuable contribution to the City and wider UK economy. This contribution is evidenced by the fact the Island provided $38.9 billion in net financing in the second quarter of 2011, according to Bank of England statistics. We fit Mr Cridland’s description of a transparent jurisdiction and have been at the forefront of best practice in financial regulation for many years. Engaging with the international community on emerging tax issues remains a priority for the Isle of Man and I welcomed the opportunity to attend the CBI discussion and meet some of the industry’s key players.’
The event in London heard that a competitive taxation system is essential to economic prosperity, and emphasised the need for greater clarity in the debate around tax management.
Mr Cridland commented:
‘Businesses making use of the tax reliefs the government makes available to them is called tax management. It’s an important function of the business world. It’s a dangerous – if sometimes convenient – myth some people peddle that all tax management is abusive, and amounts to evasion. It doesn’t.’
Mr Teare said the CBI event helped to rebalance the debate around low-tax jurisdictions such as the Isle of Man, and raise further awareness of the benefits they provide to the UK economy. He added:
‘The Isle of Man’s simple tax system and robust regulation provides distinct advantages over our competitors, and underpins our overall offering to the City of London and North West business community. The Island is an important trading partner of the UK and we share the same vision of growing our economies in a balanced and sustainable way. These are challenging times for all nations, but there are also opportunities and by continuing to work together the Isle of Man and UK can explore areas of mutual benefit.’