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):
Tynwald announces death of Douglas North MHK
Tributes paid to John Wannenburgh
MHK remembered as 'straightforward, straight-talking politician'
Chief Minister says John Wannenburgh made 'significant' contribution
Hospice CEO hopes to see 'sustainable funding' from next administration
Fiona Hatton wants multi-year funding put in place for charity's services
Firefighters use more than 65,000 litres of water tackling four outdoor fires
Dry vegetations and current weather conditions made bringing fires under control difficult