Its crunch time for Cayman Islands lawmakers who are expected to consider a series of new government fees in the upcoming legislative session.
According to Premier McKeeva Bush, proposals for the new business premises fee and new fee on money transfers are expected to come before lawmakers as early as Wednesday – when the Legislative Assembly session resumes.
The business premises fee is a proposed 10 per cent charge to tenants of rented commercial properties. It will replace the current stamp duty on leases, which is technically supposed to be collected on both business and residential leases.
Charges are also proposed on money transfers from the Cayman Islands – a two per cent fee is what was initially planned.
Customs tariffs are expected to increase two per cent across-the-board for most items, to take effect sometime in January.
Several other government revenue measures have already gone through the legislative process.
Increases to government charges on banks and trust licences and insurance company licences have already been approved. Fees assessed to mutual funds and security investment companies have also been hiked recently.
Most of those fees are collected in January.
There are some uncertainties about other fees that government has pledged to raise in the current fiscal year. Work permit fees will go up by some $3,000 per year on average for non-Caymanian workers who hold jobs in professional categories – as determined by the Immigration Department.
However, specific work permit fee increases for each individual job category have not been revealed.
Technically, lawmakers don’t have to vote in the Legislative Assembly to increase work permit fees. Approval can be granted by Cabinet members and the increase would take effect when signed by the governor.
To off-set the increase in work permit fees, government has said it intends to give private businesses the option of no longer paying a five-per-cent contribution on top of salary toward employees’ pensions. However, plans remain vague as to whether that exemption would apply only to foreign workers in the private sector, or to all employees.
The pension contribution ‘holiday’ – as it has been described in the past – will not be applied to government workers.
The slate of government fee increases and new charges was expected to raise some CI$95 million dollars in the current budget year.
The country ended its last fiscal year with a CI$81 million operating deficit, which means government spending was higher than the money it took in.
A study of Cayman Islands government revenues, to include whether direct taxation should be introduced, is under way. That review is not expected to be complete until late February, and the UK’s Foreign and Commonwealth Office has expressed concern that the study’s findings may not be in time to help with this year’s budget.