‘It’s important everyone pays their fair share’ towards funding the island’s health services, said Treasury Minister Dr Alex Allinson as he launched a consultation on a proposed NHS Levy.

But while people may say they are prepared to pay more to support the NHS, it’s a different matter when they are actually told their taxes are to rise.

Under proposals published by Treasury last week, an NHS charge based on residents’ income could be introduced by 2027-28.

A proposed levy of 2%, separate from income tax, could be imposed on all residents, irrespective of their age, according to the consultation document.

This could be charged on all income including, controversially, benefits such as Income Support that are not currently taxable.

Dr Allinson insisted that everything was ‘up for discussion’ and no decisions had been made.

He said: ‘The consultation is about seeing if people are willing to consider extra ways of paying for the NHS, above and beyond NI and income tax.

‘Increasing income tax is relatively straightforward but it doesn't encompass certain people's incomes, for example those who earn incomes in other countries and through double taxation agreements, don’t pay tax here.

‘It's looking in the round at how we can claim more from people's income to pay directly to the NHS through a ring-fenced levy.

‘I'm interested in the results of this consultation, because previously, when we've asked people about paying for the NHS, people are quite prepared to pay more tax. But we saw certainly some apprehension about that last year when we put income tax up.’

Dr Allinson pointed out that certain benefits are already taxed such as pensions and Child Benefit but earnings-replacement benefits like Income Support and Employed Persons Allowance are currently exempt.

He said: ‘Should they have a 2% levy on them, because those people are still using the NHS? That's why we're going out for consultation to see what the public appetite is for these changes.

‘Everything is on the table here. I'm looking for a steer from the people of the Isle of Man on what they think is appropriate in terms of paying for the NHS that everyone will use at some point in their lives.’

The consultation proposes a £5,000 cap on the levy for the very wealthy, but Dr Allinson said it may be the levy should be charged on complete income, irrespective of the tax cap.

A lower threshold is also proposed that could be the same as the income tax personal allowance or could actually be higher.

Dr Allinson said thatwith a lower threshold in place, there would be ‘very few’ on benefits who would be subject to the NHS Levy.

Asked what would stop the Levy just increasing each year, he replied: ‘I think the key to that is the other efforts we're doing in terms of controlling healthcare spending.

‘If we can do more preventive work, if we can put more money into primary care, we can control the healthcare costs.’

The public consultation runs until June 18.