Below is the text of the letter from several taxwatchers published in the Isle of Man Examiner on 22nd November 2017:
Joint letter printed in IoM Examiner 21 November 2017
In the wake of the Paradise Papers publicity, it is perhaps natural to react defensively and in denial; to point the finger or to blame the messenger.
Yet we believe a healthier reaction would be to reflect on ourselves, as individuals, as institutions, and as an island community. On issues of tax avoidance, we need to ask not simply whether the letter of the law has been observed, but also consider who gets hurt in the wider picture. Tax is not a dirty word – it pays for our schools, our hospitals, our police; in a sense it is the glue which holds societies together. This is true not only for the Isle of Man, but for other jurisdictions who, more than ever, can ill afford their tax revenues to leak offshore.
Specifically, we need to look firstly at how our 0% company tax rate is diminishing our own revenue, both by allowing well-off Manx residents to avoid tax by forming a company, and also by permitting many profitable trading firms, not least in the finance and e-gaming sectors, to escape a tax on their profits. They benefit from our educated workforce, our health services, our infrastructure – why should they not contribute towards these?
In terms of harming other economies, we should look at the scores of ‘payroll solutions’ outfits who operate on the island, allowing off-island self-employed workers to route their pay through the IoM to escape paying taxes and national insurance at home. We also need, for the sake of transparency, to make public our register of beneficial ownership of companies – and extend this to trusts.
None of us have enjoyed seeing the Island being shamed and ridiculed across the floor of the Commons in recent days. Failure to address such issues brings with it a real risk that our reputation will be further sullied as we await another leak and exposé.
Catherine & Eric Quirk
W R Tomlinson