Treasury seeks feedback on plans for new health tax

NHS levy wouldn't be introduced until 2027-28 financial year

A 12-week public consultation on plans to introduce a new tax to fund healthcare on the Island has opened today.

Government wants to hear from Manx residents on proposals for an NHS levy to tackle the increasing cost of providing health services.

Treasury Minister Alex Allinson says health spending has increased 14 percent each year over the last five years, at a faster rate than economic growth.

The levy would be ringfenced for health services, and would be separate from the existing income tax calculation.

The consultation seeks to explain why the levy is needed, how it will be calculated, on what the levy should be charged, how it would be collected and what the maximum charge would be.

The minister first raised the concept of a ringfenced tax for healthcare in last year's budget, when the higher rate of income tax was raised by two percent to provide additional funds for health; this was reduced by one percent in this year's budget.

It's hoped the new tax would provide a longer-term solution, although the consultation paper warns introducing this will be a complex undertaking, with the levy not expected to be introduced until the 2027-28 financial year.

The consultation is open until 18 June - you can submit your responses HERE, or request a paper copy by contacting the Income Tax Division on consultation.ITD@gov.im or calling 685316.