Government “Advocates Fiscal Responsibility And Fairness” With Amendment To The Income Tax Act - HMGOG press release

The Government says it continues to “underscore its commitment to fostering fiscal responsibility and fairness in taxation” in unveiling an amendment aimed at modernising the existing tax legislation.

A statement continued: “This initiative is driven by the manner in which the financial landscape has evolved since the introduction of the Income Tax Act in 2010. The Government recognises the transformative impact of both new technologies and evolving practices of existing financial services industries that have emerged during this time.

“To address these changes, the government has announced in Parliament that it will extend the application of paragraph 15 of Schedule 3 of the Income Tax Act 2010. DLT firms and insurance companies are within scope of this amendment.

Despite distinct asset classes, these businesses share equivalent underlying characteristics with traditional banks and money lenders, which were already within scope of the existing tax provision. This amendment is therefore a logical and progressive step to modernise our tax system, achieving a level playing field and ensuring equitable treatment within the tax system. It also ensures that DLT firms and insurance companies contribute fairly to the nation’s economic well- being, particularly, in the case of insurance companies, at times when record-high interest rates are generating substantial increased profits.

“It is imperative that the fine-tuning of tax laws is a continually proactive process throughout the year; it is the only way that the Government can maintain a correct and effective regime including providing certainty and clarity to the industry. The amendment also provides sufficient anti- avoidance measures to mitigate against abuse and possible exploitation designed to ensure that in-scope taxpayer DLT firms and insurance companies do not circumvent their tax obligations.

“Our low corporate tax rate of 12.5%, combined with highly regarded regulatory regimes and expertise in these industry sectors continues to underpin our position as a robust financial centre helping us to navigate any future challenges as we broaden the financial sector’s product offerings.

“The Government continues committed to creating a conducive environment for economic growth, fiscal responsibility, and fairness in taxation, with a focus on adapting to technological advancements and changes in the financial landscape."