Medical society slams 'regressive' healthcare tax

Proposals for an Isle of Man healthcare tax would have a "regressive impact on vulnerable people", a group representing medics has said.

The Isle of Man Medical Society (IOMMS) has responded to Treasury's plans, out for consultation, to generate more income for the island's NHS.

The new charge would be deducted from people's incomes via the existing tax return system, and is in response to a 14% year-on-year rise in health costs.

But an IOMMS spokesman said the Treasury's proposals were "neither equitable nor effective".

The consultation on the levy follows a commitment by the Treasury minister in 2024 to replace a 2% rise in the higher rate of income tax and ringfence it for health.

The tax rate was brought down by 1% to 21% in this 2025-26 financial year, with more money in the annual NHS Allocation from National Insurance contributions making up for the shortfall.

A new levy would raise about £8m more than the previous 2% income tax rise had been expected to, the Treasury said.

Minister Alex Allinson previously said a levy "would be a significant help in terms of bridging that healthcare funding gap, which can only increase as we go forward".

In response to criticism from the IOMMS, he said he was "grateful" they contributed to the consultation.

An IOMMS spokesman said while the group recognised "financial pressures on Manx Care", the levy would have a "regressive impact on vulnerable people".

Healthcare spending was "undermined by inefficiencies, governance challenges, and resource mismanagement", he added.

The group outlined a number of other concerns, including how it could affect low-income households, pensioners, and people with chronic conditions.

It said costs would put "further strain" on emergency care, adding that there had been a rise in emergency attendances of 12% between 2022 and 2024.

There would also be the risk of "eroding public trust", it said, adding that people may feel "penalised" for "systemic inefficiencies".

The IOMMS called for Manx Care and the Department of Health and Social Care to abandon its levy plans in favour of the group's own "restructure and reform" proposals.

Minister Allinson said more than 1,400 people had so far taken part in the survey, which closes on 18 June.

The responses were "important" on the future funding of the NHS, he said, to continue "provision of quality healthcare".

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