The extension means effectively that all resident trading companies will pay the 10% tax on earnings as the tax band has been extended from £500,000 to £100m.
Manx treasury minister Allan Bell, who presented the Budget to Tynwald today, said extending the lowest corporate tax band would save businesses £7m per year.
All non-resident companies will be taxed at a rate of 18%.
Other measures will see help given to the lowest income earners on the island, following the introduction of personal tax credits. This will provide lump sum payment of up to £200 to individuals who do not fully utilise personal allowances.
Net spending on public services increased by 7.6% or £29.4m to a total of £418m, Bell reported.
‘This is a two-pronged Budget. It aims to sustain the success of our economy – and therefore employment opportunities – and it provides additional support for people on low incomes. It is a responsive Budget for changing times, and an investment in the future of the Isle of Man,’ Bell said.
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