I was on the Politics Show for the North West today talking about VAT and the Isle of Man. The programme can be seen here — start at about 37 minutes.
Please also read what I have written here — which explains the issues. It’s a pity Tony Brown — the Isle of Man chief minister had not read this before talking. It’s very obvious his knowledge of VAT is very limited.
I also think the programme quite extraordinarily inappropriate in suggesting people will die as a result of this. The Isle of man can afford — on the basis of its income per head — to supply health services as good as any in the UK. The developing countries of the world — who suffer directly as a result of its existence - cannot. It’s ludicrous to suggest the Isle of Man should be subsidised when there is real poverty to be addressed elsewhere.
The arguments of those from the Isle of Man on the programme are blinkered, wrong, or plain selfish. As I said — if the Isle of Man wants to be a tax haven the least it can do is pay its own way as one. But to date it hasn’t even done that — perhaps the ultimate in free riding.
And for those who disagree on the issue of transparency — please see this report.
And does the Isle of Man support crime? Of course it does. To date it has not done automatic information exchange under the European Union Savings Tax Directive and as a result has hidden tax evaders from view — deliberately. They cannot argue, and even when they change —m as they say they will — they know the opportunities for abuse are legion and, as Panorama showed recently, these opportunities are widely used. That is their intent because they are, without doubt a secrecy jurisdiction.
Secrecy jurisdictions are places that intentionally create regulation for the primary benefit and use of those not resident in their geographical domain. That regulation is designed to undermine the legislation or regulation of another jurisdiction. To facilitate its use secrecy jurisdictions also create a deliberate, legally backed veil of secrecy that ensures that those from outside the jurisdiction making use of its regulation cannot be identified to be doing so.
That’s a perfect description of the Isle of Man.
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City of London – #5 in your own secrecy index. Isle of Man #24. Get off our back and look closer to home. Surprised Tony Brown was on the Politics show, wrong person, should have been Alan Bell, much more clued up and more appropriate to take you on.
You did very well against a remarkable bias by the show itself who took the Isle of Man’s -pro haven- parliament position and repeated it as if it was also the position of the ‘people’ of the island. You talked about the real issues when the show appeared to be after a soft time filling angle on central govt vs. regional and also seemed to be pro tax haven in how it reported.
How does it feel to be proved so consistently wrong by any official UK Government report on offshore centres published? Given your track record I won’t be asking you for any ideas on next weeks lottery numbers.
Richard
I saw your show while, by coincidence reading your blog and felt that some of the comments were interesting. I would love to see the full details of your calculations. What is included and what is not etc.
I read the report about the IOM you refer to in your blog and found it interesting. I noted the distinct lack of major countries eg USA, Germany, France etc on the report list. The UK was on the list. Does this mean that the UK is a secrecy Jurisdiction to the rest of the world?
Incidentally I think readers of the blog should remember that the European Savings Directive was for EU member states and allowed (as a transitional measure) for a withholding tax to be taken. Some EU states (Austria, Belgium and Luxembourg) have opted to apply withholding tax rather than full information exchange. So they are withholding tax, exactly the same as the Isle of Man who is not a member of the EU.
As things stand I believe the IOM and other Crown dependencies have committed to information exchange from July 2011.
IOM has a number of bilateral tax agreements (TIEA) and more on the way
UK; Australia; Germany; France; Ireland, Belgium; Canada; Estonia; France; Germany; Italy; Netherlands; New Zealand; and Spain. This is why it was placed on the OECD white list. Its placement on the white list shows that it has substantially implemented the internationally agreed tax standards.
Also when it comes to secrecy I would respectfully like to point out that the case law governing disclosure of information on the Isle of Man is the 1924 UK case, Tournier v National and Provincial. Strangely that is the same case for the UK secretary.
Anyway my rambling is moving off the point some what. I would love you to share with me the basis of your calculations. I would find it very informative to cut through the spin.
CEF
great blog,keep up the good work and telling it like it is.
@Phil Harrison
Never mind about the secrets of other jurisdictions higher on the list than the IoM. The bottom line is the IoM should NOT be a secrecy jurisdiction at all. Tony Brown, Bell, Aspden & Spellman say it isn’t. The simple fact is it is, so why do they have such an overwhelming need to deny the evidence?
Developing countries suffer as a direct result of the existence of the Isle of Man? How does that work? The isle of Man has a population of £75000, how can the actions of so few possibly affect the vast number of people in the developing world.
To be honest, your last paragraph sums it up quite well “legally backed veil”, in other words NOT breaking the law.
Richard,
You suggest that the Isle of man can afford — on the basis of its income per head — to supply health services as good as any in the UK. What you have failed to account for is those who live here because of lower taxes and companies who locate here because of lower taxes. If you raise taxes they will leave, leaving the remaining population with no income to support the island’s infastructure, and then you have an island needing rescue from the parent country that destroyed its economy. Do you have any constructive suggestions as to how to avoid this situation?
Its sounds like the Isle of Man will be destined to return to the situation it found itself in when the “common purse agreement” was first introduced.
Thought you made your points clearly and forcefully Richard.
Got the impression that IOM reps were implying that tax rates have to stay low and that Gov’t expenditure has to be reduced. Indeed the BBC interviewer assumed that expenditure cuts were the only solution when interviewing Tony Brown. He however recognised that income could be increased although he steered clear of talking about increasing taxes. Is there any good reason why their tax rates should be so much lower than on the mainland?
Rick B
I agree – the show was remarkably biased, wasn’t it?
That’s a BBC line by the way – saying a business should pay the tax it owes is, according to the BBC, an anti-business stance
Weird, don’t you think?
Richard
CEF
All is available on the secrecyjurisdictions.com site at http://www.secrecyjurisdictions.com/ and at http://www.financialsecrecyindex.com/index.html
Richard
Vicar
What you fail to take into account is that you are asking for the Uk to subsidise the standard of living of those who choose to live in the IoM because they want to pay low tax and sup0ply services that undermine the tax revenues of the UK which supply the subsidy they live upon
You also ignore the much greater need for subsidy for the bottom billion or so in the world
Why on earth should we subsidies your abuse?
If you want to stop abusing then we could of course provide funds for new investment
Until then I think the principle that the abuser pays is a very good one
Richard
Nathan
Please read Christian Aid’s Death and Taxes
Richard
CEF
Compliance with the type of regulation that has left us with the crisis we’re in is not transparency
It’s game play
Now stop playing and become transparent
I have dealt extensively with all the issues you raise on this blog
Richard
Mark
There is good reason for the IoM tax rates being lower
The IoM has been captured by the dogma of extreme neo-liberalism and by the financial services industry who hate everything to do with government – unless of course it is in the form of a handout for their benefit
So they believe that low tax is critical – more critical than the health of the people of the Isle of Man, or so it would seem
Richard
@Jim for Justice Oh I see, conveniently forget everyone else, let’s just bash the Isle of Man. I don’t agree that it is a secrecy jurisdiction, just because it appears on Richard Murphy’s index.
I do agree the island needs to significantly increase its efforts to be transparent, but I wouldn’t be as dismissive of its intentions and efforts so far as you are. There are arrests and prosecutions for abuse over here all the time. You may conveniently dismiss them as being token gestures, but I am not convinced that is the case. There is always room for improvement, but that does not mean that efforts to increase transparency and regulation are not already being made. Manx politicians are far from perfect, but I also wouldn’t regard them as quite the evil conspirators that you have. According to your own rankings, the UK and US have a far greater record of abusing the poor than the Isle of Man.
As far as subsidy is concerned,with over 300 billion being channelled into the UK economy from the Crown Dependencies in one quarter, I think a more appropriate question is who is subsidizing whom?
Richard
I have not raised issues, but have provided your readers with the information missing from your blog. Without it a reader is not left with a non balanced impression.
I merely have asked where I can find your numbers and how they have been constructed. What is in and what is left out. That way I can assess your postulation.
By the way, the crisis situation for the sterling area is a direct result of UK Economic Policy and UK Banking practice. I would be surprised if the IOM and other Crown dependencies could precipitate such a massive funding issue. Perhaps you give us too much credit. It is not all part of a grand plan, honest.
CEF
If you could be so kind as to
Sorry for the double post
Richard
I have not raised issues, but have provided your readers with the information missing from your blog. Without it a reader is not left with a non balanced impression.
I merely have asked where I can find your numbers and how they have been constructed. What is in and what is left out. That way I can assess your postulation.
By the way, the crisis situation for the sterling area is a direct result of UK Economic Policy and UK Banking practice. I would be surprised if the IOM and other Crown dependencies could precipitate such a massive funding issue. Perhaps you give us too much credit. It is not all part of a grand plan, honest.
CEF
If you could be so kind as to point me in the direction of your numbers I would be grateful
Richard
I have been searching your blog for your IOM VAT and cannot find them. I guess the lack of response says something
CEF
Believe it or not I do not exist to serve you. The lack of response says I have better things to do than find links for people too useless to do their own searching.
Try here http://www.taxresearch.org.uk/Blog/2009/05/18/isle-of-man-costs-uk-at-least-15-billion-a-year/
Richard
@Richard Murphy
No Richard, you are here for your own ego. Girrl
It is not a secrecy jurisdiction because it is on the Tax Research list — it is on the list because it IS a secrecy jurisdiction. The evidence is irrefutable, so why the need to ignore it?
@Jim for Justice
What information don’t the KSF depositors have?
“And does the Isle of Man support crime? Of course it does. To date it has not done automatic information exchange under the European Union Savings Tax Directive and as a result has hidden tax evaders from view — deliberately.”
I have just been rereading this post, and watched the interview on iPlayer. It is criminal to follow legal rules enshrined in a EU Directive? What planet do you live on Richard?
Girrl
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