The Isle of Man News has a fascinating article asking whether the pressure has been taken off the Isle of Man now on tax matters.
Much of the analysis is wrong because they think the issues are now resolved, and that is far from true but just for the moment I want to highlight another issue, which is the credit implicitly given to the Tax Justice Network for forcing change. As they say:
Over the past five years, our financial services, tax rates and Customs deal have come under intense scrutiny from beyond our shores.
We’ve had the EU question our corporate tax regime, the painful revision of our VAT deal twice in two years, an inquiry commissioned by the Westminster government has run the rule over our ability to withstand financial shocks and the OECD has reviewed our tax transparency and co-operation.
It seems that barely a week went by without another brickbat being lobbed our way by Brussels, London or Washington.
And quite right too. All of then were justified. As they then out it though, discussing the introduction of incredibly limited automatic information exchange under the European Union Savings Tax Directive:
It is notable that even the Tax Justice Network, consistent critics of so-called ‘secrecy jurisdictions’ has acknowledged the work the island has done in this area.
On VAT, the loss of more than £175 million in revenue — about one third of total government income — has caused major problems in balancing the budget. But even here, the UK has indicated it won’t be back for more.
And on zero/10, now finally resolved with the announcement last week by Brussels, criticisms from Europe were dealt with by decisive action: by scrapping ARI, the anti-avoidance measure, that the EU Code Group considered as harmful. The result was to save the corporate tax strategy and the thousands of jobs that depend on it.
Tax justice campaigners argue that offshore centres help to plunder resources and siphon wealth from Third World Countries.
Mr Bell denies the Isle of Man plays any such role. He confirmed that the island is considering extending Tax Information Exchange Agreements to developing nations, a move advocated by the OECD’s Global Forum — so long, he said, as an appropriate model is in place to do so, given that many such countries did not have a properly developed tax system and there were issues of corruption in some regimes.
We've been right on everything else. We're right on this too. And that's why none of the pressure on tax havens will be going away in 2012. Because that was the issue that always motivated me and the Tax Justice Network.