THE Isle of Man must brace itself for further threats from beyond our shores as world leaders step up their campaign against so-called tax havens.
That's the warning from Treasury Minister Allan Bell, who says the Island cannot be complacent if it is to keep itself on the 'white list' of transparent tax jurisdictions.
No official announcement was made at the G20 meeting of world leaders in Pittsburgh last week over further action against those countries deemed to be tax havens or secrecy jurisdictions.
But it has emerged that a review is already taking place of the Organisation for Economic Co-operation and Development's white list to ensure those countries on it are delivering on their tax agreements and not just 'paying lip service' to transparency, said Mr Bell.
And he said that it was likely that those that fell into that latter category could be taken off the white list.
'I'm very confident that this further review will not impact on the Isle of Man,' he said, pointing out that the Island's white list status and commitment to automatic exchange on tax information had won 'fulsome praise' from the UK and the OECD itself.
There is, however, a strong suspicion that the G20 has an undisclosed agenda to drive forward a global corporate tax policy, undermining a nation's sovereign right to set its own tax policy.
UK Premier Gordon Brown hinted at such a move ahead of the G20 although he did not raise it again at Pittsburgh.
Mr Bell said: 'Gordon Brown made an interesting statement calling for the G20 countries to intervene not just in smaller countries but large economies too if they were said to be deviating from international economic norms. It's quite a radical suggestion and unprecedented.'
UK Chancellor Alistair Darling announced a review of the crown dependencies and overseas territories in his pre-Budget report last year – three weeks after he made his infamous comments to a Treasury select committee about the Isle of Man being a 'tax haven sitting in the Irish Sea'.
The Foot Review is due to report in the next month.
Mr Bell said: 'We are confident that the Isle of Man's contribution to that review will be seen in a very positive light and the Island will avoid direct criticism.
'But other agendas are being played out and we have to recognise that there might be some adverse comment.'
He said the Island was dealing with international power politics and even a change of government in the UK may not reduce the threat.
He said: 'The Isle of Man has been extremely successful over the last decade in steering a course to protect us from the worst of international criticism. It is vitally important as a result that we don't get complacent.
'It's likely there will be an election soon in the UK. There may be a change in government. But the UK faces extremely serious problems with its public finances and a change in government doesn't necessarily mean a change in approach.'
WHAT DO YOU THINK?Send your comments to bizviews@newsiom.co.imYOUR COMMENTSIOM newspapers – try to be a little neutral – 'so-called tax havens' is not a neutral phrase. Like it or not the IOM's eggs are all in one basket – too many banks, bankers and overpriced houses. The isle of man would do well to acknowledge it is the poor old British or should I say U.K. taxpayer propping up the banks over here.
C.M.The time has come for a referendum on independence. Traditional notions that a benign United Kingdom would protect the island from the excesses of the OECD and G20 have now been turned on their head. The greatest threat to our wellbeing comes from the UK itself, whose unending rhetoric on "tax havens" contrasts sharply with the relatively even-handed approach of the OECD. As an independent micronation, we would be safe from any attempt by the UK's increasingly criminal government – which in my view may well attempt to rig the forthcoming election or even launch a coup d'état should it lose – to inhibit our sovereignty. Equally, as an independent micronation within the European Union, we would have been capable of holding the UK Treasury to account for sequestering the assets of KSF (IOM) – taking the matter to the European Court were the £552 million not returned as it should have been.
RFWhat happened to the upbeat Mr. Bell of a few weeks ago? Come to his senses perhaps? The UK, US and EU will settle for nothing less than full automatic exchange of information for accounts held in every participating jurisdiction. In other words full details all foreign accounts will be disclosed to the jurisdiction where the account is held. That would be the end of offshore banking. Two choices. Become a totally independent country and withdraw from the requirements of the UK, US, EU, OECD and others and enjoy a major advantage over the suppressed jurisdictions, or plan for diversification from financial services. Procrastination is not an option.
ACDear Sir The activities of large companies that are intent on tax avoidance needs to be examined, possibly through accountancy practices. The registration and deregistration of companies in the IOM appears to have been used effectively to hide wealth or income from unfair means - there are no laws to prevent such activities - that is why I agree with world powers intervening. My concern is, that by manipulating a 'low tax' company structure, taxes are not being paid to countries most in need of support for their population. 'I am all right jack' is not the way forward.
MOSSES