Tynwald members are to be asked to vote on whether or not they think the island’s top rate of income tax should revert back to 20%,
The Lib Vannin Party leader will bring the motion, as well as others, to the December sitting of Tynwald.
Originally intended to be temporary while the Treasury worked to create a new tax, termed an “NHS levy”, the 10% increase in the top rate was announced during this year’s Budget.
While Treasury Minister Dr Alex Allinson has said this will now take longer than planned, will require primary legislation and that it has become “more complicated than had been originally anticipated”.
Responding to a written question, Dr Allinson said: “A National Health Service levy would effectively be a new tax. It is imperative that we work carefully to ensure that any changes to the taxation system are properly considered, any impacts are correctly calculated and that such changes help contribute to the revenue that health and social care requires both now and in the future.”
December
While Dr Allinson’s next budget in February is now unlikely to see the former 20% higher rate return, Mr Hooper is asking Tynwald to effective politically bind the minister’s hands.
His motion says that “Tynwald is of the opinion that the higher rate of personal income tax should revert to 20% in the 2025 Budget”.
A second motion from Mr Hooper says will ask Tynwald to say that the tax cap “should be ceased for new applications or renewals from the end of the 2024/25 tax year”.
National Insurance
However, such a move will mean that the extra funding given to healthcare, paid for by that rise in income tax, will be lost and will need to be replaced.
In what appears to be a way to plug this gap, away from tax, Mr Hooper will seek to have more people paying National Insurance as he will also seek to have Tynwald support a bid to have the age cap on those contributions removed.
Currently it is paid by every worker over the age of 16 and under state pension age (currently 66).
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