Treasury Minister Allan Bell almost broke a habit of a lifetime and made a good Ministerial decision – to announce, in respect of the EU Savings Directive, the IOM will move to an automatic exchange of information only, as of 1st July 2011, and remove the withholding tax option.

Treasury Minister Allan Bell almost broke a habit of a lifetime, yesterday (Wed 24^th June, 2009), and made a good Ministerial decision – to announce, in respect of the EU Savings Directive, the IOM will move to an automatic exchange of information only, as of 1^st July 2011, and remove the withholding tax option.

Mr Bell made this announcement at an OECD Forum, in Paris, and whilst it was greeted with applause by, among others, Stephen Timms, Financial Secretary to the UK Treasury and Lord Bach, Minister responsible for the Crown Dependencies, it certainly ruffled a few feathers closer to home.

Rushen MHK Juan Watterson is a bit peeved Mr Bell told the media about the change in policy before his Tynwald colleagues; and the Manx Herald agrees it was a bit discourteous of Mr Bell not to inform them first.

However, the Manx Herald does take issue with Mr Watterson’s assertion, in an interview given to Manx Radio, the debate on this issue hadn’t even started before Mr Bell announced the decision – as it clearly had.

Perhaps though Mr Watterson can be forgiven for thinking this way as it commenced long before he was elected to the Keys; and when he was probably still studying for his accountancy exams.

As far back as October 2002 a modification was made to the tax strategy and which included the recommendation (3.4) “…the Treasury supports the tax strategy containing a commitment to the same measures on automatic exchange of information as EU member countries”.

But Mr Watterson was present when Mr Bell read out this year’s budget speech in which he said: “I expect those states who opted for the transitional withholding tax route to come under further pressure to move to automatic exchange of information”; and added he would keep the Island’s position under review.

It is unfortunate Mr Watterson didn’t use the opportunity to share with Mr Bell his thoughts on the issue, as it is obviously a bit too late now; and perhaps Mr Watterson has learned a vital political lesson having been caught knapping on this occasion.

The Manx Herald fully supports the policy and Mr Bell’s opinion this decision sends a strong signal, to the international community, the IOM is moving towards greater openness and transparency; although we wouldn’t go as far to say it will mean the IOM will become a secrecy free jurisdiction. There is still some way to go yet on removing the secrecy surrounding beneficial ownership of companies and trusts and company accounts etc.

At least this decision should deter any remaining, or prospective, foreign tax evaders (as opposed to those who bank in the IOM for genuine reasons and make full disclosures to their respective tax authorities) from trying to hide their money in the IOM – the Island neither wants their money nor needs the bad publicity that type of business attracts.

But in offering its backing to Mr Bell’s decision - even if it was made with one eye on influencing the forthcoming Foot Report - the Manx Herald does retain one concern; and that relates to the procedures adopted in releasing the data.

The authorities in the IOM have not shown much greater competence than their colleagues in the UK in protecting data from disclosure that shouldn’t be disclosed. If a cavalier attitude or a sloppy procedure is adopted, in relation to the release of this information, then Mr Bell, and the Treasury, will soon have the Manx Herald on their backs again.