The Isle of Man could face a revenue shortfall of up to £40 million as a result of the UK's cut in VAT rates to 15 per cent.
The figure was given by Treasury Minister Allan Bell to the House of Keys this morning (Tuesday).
The loss reflects the large contribution made by VAT and excise duty to the Island's public finances.
Mr Bell said the VAT change was a temporary measure up to the year 2010, but he warned members the shortfall would be felt in the short-term (audio file attached):
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