Taxwatch Update – 16 July 2017

Dear all,

TaxWatch is pleased to invite you our next meeting:

Date: Wednesday 6 September

Time: 2.00pm

Location: 11 Hilary Road, Douglas

Our speaker will be Alf Cannan, MHK and Treasury Minister.  He has been asked to address us on the Island’s offshore industry in general, and in particular commenting on the current position which allows Manx residents to escape personal income tax by registering as companies.  For several of us, this issue has been a thorn in the flesh for some time.

Incidentally, there’s an interesting headline story in this week’s Manx Independent. In his annual report,  Chief Constable Gary Roberts states that ‘the nature and scale of financial crime investigations facing the constabulary are without precedent’, and that three highly-complex cross-jurisdictional financial crime investigations are currently underway. 7 officers have been working on Operation Braid (the Paul Bell case) for ‘the best part of four years’.  He adds, “If you are going to play in the big world of offshore finance you’ve got to have the infrastructure to support it. International standards have got higher and higher.”  Last year’s report by MONEYVAL (a Council of Europe body) criticised the IoM for the low number of prosecutions; as a result government set up a new Financial Intelligence Unit, which is now leading to more investigations.  Government is allocating an extra annual £1m to fund more investigators and an IT system.

And in the same newspaper, we read of another problematic Manx investment fund – Quadris – which has been put into receivership, with 1,200 investors fearing they will lose much of their money.   They are critical of our regulator, the Financial Services Authority, for failing to protect their interests.  The FSA is not obliged to licence or regulate schemes which are aimed at ‘experienced’ investors; neither is there a compensation scheme for them when things go pear-shaped.  Quadris sought investors’ capital for developing teak plantations in Brazil, and the case has similarities to the recently failed Premier Group.  The Louis Group scandal is still being investigated, and one has to ask whether light-touch regulation, combined with a 0% company tax rate, has attracted to the Island more than our fair share of dubious players, with consequences for our international reputation.

Hope to see you on 6 September.  Feel free to invite friends who may be interested.

PS.  Some of you may like to post or read stuff on Taxwatch’s facebook page: https://www.facebook.com/groups/265552826902505/?fref=mentions

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