Nothing decided on tax measures

Leader of Government Business McKeeva Bush was in a long telephone discussion with officials in the United Kingdom Thursday trying to work out an arrangement that would avoid the implementation of direct taxation.

Mr. Bush entered the discussions around lunchtime and they were expected to last until 5pm, said United Democratic Party General Secretary Ellio Solomon.

‘This is an unprecedented challenge that the country is facing,’ Mr. Solomon said. ‘The UK, as a result of the extravagant spending of the [People’s Progressive Party], is insisting the Cayman Islands impose some form of taxation on the people of the country.’

A press briefing which had been called for 10am Thursday morning, presumably to announce new revenue measures, was cancelled. However, the UDP was scheduled to go ahead with a planned public meeting next to the Court House Thursday night.

Mr. Solomon said no decisions about taxation had been reached by 2pm on Thursday.

‘Mr. Bush and the UDP are reviewing every option available to us to avoid going [the direct taxation] route and we’re using every resource at our disposal,’ he said.

Among other things, Mr. Solomon said the government was in discussions with the private sector about how to move forward.

As a result of the financial crisis, the Cayman Islands Government has asked the United Kingdom for permission to borrow $372 million to help get it through the end of the fiscal year. The government has already secured lenders for the money, however the UK’s permission is needed because the borrowing would take the Cayman Islands over the debt limits allowed by the Public Management and Finance Law.

The UK has so far declined to give that permission, saying the Cayman government needs to expand its revenue base. It suggested and is now pushing for direct taxation – in particular payroll taxes – according to Mr. Bush.

The prospect that the government would not be able to pay government employees this month because of the lack of money was avoided as civil servants received their salaries on Thursday, Financial Secretary Kenneth Jefferson confirmed.

‘Civil servants received their pay in full and on time,’ he said.

It is unknown at press time, however, if the government would be able to make the payment due to general contractor Tom Jones International in order to keep the John Gray High School project going. The firm had said that unless it was to receive payment of amounts in arrears by today [Friday] at 3pm, it would shut down the project and lay-off workers.

Efforts to reach Education Minister Rolston Anglin Thursday were unsuccessful.