THE outgoing president of the Chamber of Commerce believes it is possible the EU's attack on the Island's zero-10 corporate tax regime is not over.
Speaking at the Chamber's annual general meeting at the Palace Hotel and Casino, Douglas, yesterday (Thursday) Nick Verardi praised key individuals within the Treasury for seeking to protect the current structure.
Back in February Treasury Minister Anne Craine MHK announced how the government had decided to withdraw the attribution regime for individuals (ARI).
ARI was likely to have been declared "harmful" under the European Union Code of Conduct for Business Taxation so the Isle of Man Government pre-empted that move by withdrawing it.
But Mr Verardi believes the Island may be forced to think again over zero-10 in the future.
He said: "In my address 12 months ago I suggested that the outcome of the zero-10 corporate tax debate was an absolute priority for the long term wellbeing of this Island.
"As I speak today the signs are promising but not conclusive and chamber would like to place on record its recognition of the work undertaken by key individuals within income tax and the Treasury department in seeking to protect our current structure.
"Our government moved quickly in the face of the EU Code of Conduct Committee concluding adversely against our zero-10 corporate tax regime. The speed and timing of our response was crucial.
"However, I predict the EU's attack is possibly not yet over and we may then be forced to think again, moving to a 0-0 corporate tax position, losing the £18m to £20m that the banks currently pay to the Treasury.
"However, this shift could be used as an opportunity - placing us on a different and very competitive platform from our competitors, in particular the Channel Islands."
Mr Verardi then went on to talk about the customs and excise agreement with the UK.
He said: "The position on our customs and excise agreement appears less clear cut.
"Rumours are abound that the UK is in the throe of renegotiating the current position to our disadvantage, once again, and last time round this cost us £90m year one; £140m year two.
"Ours is not to second guess when such an arrangement ceases to become beneficial, more to re-emphasise that the impact of these 'renegotiations' should already be evident as government seeks to re-align expenditure with reduced income.
"Indeed, chamber has long since lobbied for the size and scope of government to be reviewed; in fact this has been one of the consistent messages delivered by my predecessors.
"As the events unfold there will be a real expectation that this critically important matter be tackled in earnest.
"We all hope there is a plan B ready for implementation.
"To date we have seen only flashes of evidence that this has been confronted."
