Tax haven survey's unexpected boost for Isle of Man - Isle of Man Today .
A FINANCIAL secrecy index created by tax reform campaigners has ranked the Isle of Man 24th out of 60 jurisdictions for lack of transparency.Tellingly, the index produced by the Tax Justice Network — a vociferous critic of the Isle of Man — places the US state of Delaware at the top of its league table of tax havens, followed by Luxembourg, Switzerland, the Cayman Islands and the City of London.This suggests these leading economic centres are more culpable of promoting international financial secrecy than the offshore centres they've attacked since the global financial crisis began.
Wishful thinking by the Isle of Man - but amusing none the less that they'll seek TJN approval when it suits them.
Why wishful? Because there is a wilful misreading of the FSI in this story. The index measures the impact of a location's opacity, not just the opacity itself. Most small jurisdictions are more opaque than larger ones (the US is an exception) but have smaller impact and so appear lower in the index. The IoM has relatiovely small volumes of financial flows - that is why it has a low ranking. It's opacity rating is 83% - which is poor.
So don't get complacent guys. We're not going to be singing your praises for a long time yet.
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But isn’t the Transparency Index a good way for organisations with scarce/limited resources who are wanting to stimulate change to evaluate the most effective areas (Countries) to lobby and apply their resources?
I would have thought that the calculation of the Index score is intended to combine both risk and impact in making the assesment.
I have briefly looked at the Index, and IMO it looks comprehensively prepared and its clear that alot of work has been put into it, but I wonder about how complete the information is.
For example the number of trusts in existence in the Isle of Man is in the public domain and official reports, yet it wasn’t included in the base data.
This isn’t meant as a criticism of the work done, just a comment on the difficulties in reliable and comprehensive cross-jurisdiction comparison.
Greetings Richard,
I heard the Manx Radio interview with the Treasury Minister for the Isle of Man, Alan Bell, where he clearly misrepresented the Transparency Index as being a measure of low opacity and completely ignored the relatively small volume of financial flows as a far more significant factor affecting the Island’s ranking.
I live in the Isle of Man and do not wish to be regarded as being part of a tax haven – such misrepresentation does not help to improve our international reputation. As for increasing the Isle of Man’s taxation base, we would have to be extremely careful about this – yes, it is desirable to increase taxation to sufficient levels to support the public services that the electorate wish to enjoy rather than cutting the public sector and damaging the health and education of the weakest in society, which it seems is most likely to be the outcome of the revised revenue sharing agreement, but the Island needs some fiscal incentive to survive economically – there are geographical factors that mitigate against island-based companies being able to compete in the global market – a return to 30%+ unemployment that led to the UK providing subsidies in the first place must be prevented.
The issue is what is a fair level of taxation differential between the UK and the Isle of Man? A fair differential would allow the Manx economy to succeed and support similar standards of living as in England and Wales whilst not distorting the global, European or British economies through greed.