onsdag 21 mars 2007

Isle of Man tax haven


P3150027
Originally uploaded by jim_buchan.

Once again the old story surfaces, of tax havens causing a loss in revenue that should go to the British exchequer. This time it is the Isle of Man that has come under fire. (Observer business 18 March)

If the Isle of Man were subject to the mainland UK tax regime, its economy would be like that of outlying regions such as Cornwall, with high unemployment, which would lead it to suck in funds from the exchequer and probably the EU as well, far in excess of what is "lost".

If the chancellor does not want to lose revenue, he and his advisers need only to bear in main that people and capital are mobile, but land is not; it cannot be hidden or removed to a tax haven. Taxation of people and capital is the problem. The system is inevitably full of loopholes. Attempts to close them result in ever-increasing complexity and the process is ultimately futile.

The remedy for tax avoidance and evasion is in the hands of our own government.

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