The government said there are no plans to change the value-added tax rate at this time.
This comes after the Chamber of Commerce and Industry backed a call by cafe owners for a review of Manx's VAT rate to encourage recruitment into hospitality businesses.
A government spokesperson said the focus was on increasing the number of economically active new residents, while the country was “committed to honoring” the VAT agreement with the UK.
The island's standard tax rate of 20% reflects the UK standard tax rate, and national VAT data is used to calculate the proportion of indirect tax revenue the island receives from the UK under the Final Expenditure Revenue Sharing Agreement.
However, he said there were a number of initiatives underway by the Ministry of Corporate Affairs to support the hospitality industry and “address key barriers to growth”.
This included working with the Visitor's Office to “stimulate demand” in the hospitality sector and “the wider local economy” and to drive economic strategy.
Earlier this week, Victory Café owner Vicky Cottier said hospitality companies would compete with other employers to offer their staff the pay they “really deserve” as profit margins are “severely squeezed”. He said he could not.
The spokesperson added that hospitality businesses “experiencing operational difficulties” are “encouraged” to seek support from the Isle of Man for Business.
She said: “The focus is on increasing the number of economically active new residents who can provide the skills and investment the island needs.”
Under the plan, the government will create 1,800 new roles by 2026, she added.
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