Those were the conclusions of a joint IFS and the Isle of Man Bankers' Association panel discussion held at the Villa Marina.

The springboard headline for the debate was: Tax, the greatest threat to the Isle of Man? The panel comprised chairman of West Group Ltd John Nugent, director Isle of Man Finance John Spellman, head of income tax Malcolm Couch and Chamber of Commerce chief Executive officer Mike Hennessy.

Apologies were offered on behalf of Treasury Minister Allan Bell, who due to 'unavoidable circumstances' had to cancel his seat on the panel.

Chairman for the evening and former IFS president Dougie Elliott, opened to an audience of more than 200 people with an apt quote from Edgar Hoover summarising present circumstances: 'About the time when we think we can make ends meet, somebody moves the ends.'

West Group's John Nugent said: 'Tax, or its absence, is fundamental to the success of the Isle of Man.

'We are subject to competition from other tax friendly countries and if we lose control of our tax destiny then this competition will take our business.'

He said he had 'confidence' in the Treasury to steer us through and that the answer was to turn away from 'off the peg tax solutions' and conduct 'solid tax planning' and that tax 'freedom or neutrality' is essential to the IoM finance industry.

How we plug into international acceptance was one of the key themes discussed by income tax assessor Malcolm Couch.

The Global Forum on Transparency and Exchange of Information for Tax Purposes, held in Mexico on September 2009, was a catalyst for Treasury to 'conduct peer reviews of tax standards of member countries' and identify the perceived threat of compliance levels in various areas.'

Mr Couch said the EU savings directives were being sabotaged by Luxembourg and Austria who were 'fighting rearguard action' and drawing in the Isle of Man as a pawn. 'Our weaknesses,' said Mr Couch 'are that we are not an economic giant and neither have we any International friends.'

As to the immediate future, he said, if the Tories are conferred in forthcoming UK elections it may benefit us. The Conservative party's historical relationship with Europe is more sceptical and views upon Crown Dependencies and taxation are also quite marked.

For Isle of Man Finance director John Spellman, 'we are a leaf on the wind of international politics'.

He continued: 'The Isle of Man's position is volatile, we need to stay in the international game and if we drop a Manx stone, ripples will seen.'

Mr Hennessy said: 'Tax is fundamental, but it's not in the top three (items of economic importance). Corporate service providers have many well paid employees, they have deposits in the banks and the retail sector describes them as still spending.'

As far as his members' views on corporate tax profits, he said: 'In order to pay this, profit was needed in the first place.'

The VAT shortfall has left a 24 per cent gap in the budget which needed to be rebalanced. This could be done by raising income, reducing costs, dipping into reserves and selling assets, although the last two, he added, were short term options only.

John Spellman said that the Mr Bell's budget on the February 16 would be the most important for many years and until then it was not the right time to be chopping and changing.

The evening was closed by Standard Bank managing director John Coyle, whose humorous conclusion was that tax is 'maximum milk for minimum moo'.

WHAT DO YOU THINK?
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YOUR COMMENTS

Is this a joke? Did these idiots just get together and this is all they could think off/say. We all know this anyway yet nothing gets done.
PS

If the UK government has torn a 'nick' in the taxation agreement why does the IoM government not put the thing to death and tear it up completely?
GRAHAM OSBORNE

Reconsider if zero corporate tax is really an incentive to business or is it just lower taxation than other jurisdictions – what is the real sensitivity. All companies resident in Isle of Man should pay tax in Isle of Man regardless of where their parent is – has anyone ever considered the fact that, if zero tax is so compelling, why Tesco, M&S etc do not post their profits here even for the local parts of their operation? Let's have the Isle of Man Bank back as a national bank to hold 'Treasury' funds from the finance community by offering better rates etc than the UK – keep local deposits local so another fiasco like the KSF money that went onshore because it had nowhere here to go cannot happen again. Go independent on VAT and bring the rate down to benefit local businesses and attract distribution type of companies, particularly digital ones. Bring transport under Govt control so it can be subsidised to general benefit, not in the way that the buses are to make a loss, but to not make a profit – again with profits to people like Flybe leaving the island. Use insurance syndicates to manage risk using the collective as a bargaining chip – UK medical care (both travel and specialist care) not to NHS but to private companies in the UK. These are the current agenda items that one would hope would meet the public agenda at some time – if they are not viable then the very least we deserve is that the numbers are properly presented to show why not.
CROSSAG