Treasury Minister Dr Alex Allinson has hinted the ‘temporary’ 2p increase in the higher rate of income tax may continue beyond the current financial year.

The higher rate of income tax was raised from 20% to 22% in the last budget, with the money ringfenced for healthcare.

At that time, Dr Allinson said the increase was temporary and he intended to replace it with an NHS levy.

But making a statement in Tynwald, he said: ‘I announced last year that the increase of 2% in the higher rate tax of income tax would be a temporary one and that options in respect of a healthcare levy would be developed to replace it.

‘Given the current tight fiscal situation the policy options available are more limited than I anticipated, but I remain committed to bringing forward policies which support working families, allow us to gather enough revenue to protect public services, but also encourage economic growth.’

In Tynwald, Ramsey MHK Lawrie Hooper, speaking shortly after announcing his resignation as Health Minister, asked: ‘The Minister was quite clear when he brought that through that it would be a temporary increase for a year. He’s just said today that he can’t actually recommit to that, it may no longer be temporary.

‘Can he confirm that the levy proposals will be brought back, will be consulted [upon], and won’t risk being seen as essentially the same as the current 22% rate?’

Another former health minister, Douglas North MHK David Ashford, asked: ‘Is the Treasury Minister now saying that 2p rise is not a temporary measure?’

The Minister replied that he had made it quite clear that a levy will encompass income that is not currently taxable and it would ‘incorporate more income in terms of different revenues streams and complied with aspirations of broadening the tax base by raising revenue from other areas rather than just people’s income’.

Explaining what those other revenue streams could be, he said: ‘One of the sources of income that isn’t currently taxed on the island is that earned in other jurisdictions, and that was one of the first areas where a levy was looking at.’

‘We have a range of people who take up the tax cap. A levy could be provided for them as well in terms of their income. So there are a range of different options that we are looking at or working up, to present to members.’

Dr Allinson added: ‘We are committed to work with the Department of Health and Social Care to support the NHS on our island. However, we area also aware of the significant strains that Manx Care are having.’

He told Media IoM: ‘I didn’t announce the continuation of the 22% upper tax rate for next year as any plan to do so would need to be part of the 2025-26 Budget.’ In his statement to Tynwald, Dr Allinson also announced that he would be introducing new legislation next month for a 15% domestic top-up tax for large multinationals.

This will come into effect on January 12 next year and is expected to bring in around £35m in revenue a year, of which £25m will be additional to the changes introduced in February in relation to banks and large retailers.

Chief Minister Alfred Cannan insisted that privatisation of healthcare is ‘not on the table’ but went on to say ‘we should be prepared to move as quickly as possible to evaluate what different funding models might look like.’

He urged Tynwald members not to ‘dismiss things on the grounds of an ideological position’.