Private sector unites against taxes

Public expenditure cuts urged

TOPPrivatesectorLEAD

In an unprecedented move, more than
100 private sector associations, businesses and individuals have banded
together to speak with a united voice against the implementation of direct
taxation in the Cayman Islands.

The form of the discourse came in
an open letter to Governor Duncan Taylor, Premier McKeeva Bush, elected members
of Cabinet and other members of the Legislative Assembly. 

“The
current crisis has united a previously fractured private sector behind the
common purpose of repairing our economy and taking the opportunity to make
Cayman again a desirable place to work, live and invest,” the letter begins.

“In
the past Cayman has attracted investment and business on the back of its
consumption-based revenue model. This model created a direct alignment of
public and private sector interests. Direct taxation severs this link and will
undermine the foundations of the economy at the worst possible time and it will
discourage new investment and business from existing and new sources,” the
letter states. “The only place from which the Government’s revenue is derived
will shrink in a vicious downward spiral.”

The
letter is supported by 10 private sector associations including the Cayman
Islands Bankers Association, the Cayman Islands Society of Professional
Accountants, the Cayman Islands Real Estate Brokers Association and the
Insurance Managers Association.

Thirty-six
businesses supported the letter, including the law firms Maples and Calder and
Ogier; the accounting firms Deloitte and KPMG; and the real estate companies
RE/MAX, Coldwell Banker, Century 21 and IRG.

Fifty-six
individuals also supported the letter, including many prominent Caymanian
businessmen and women.  Some of the signatories
include A.L. Thompson Jr., Bobby Bodden, Burns Conolly, Rex and Dale Crighton,
Naul Bodden, David Ritch, Dan Scott, Michael Alberga, Kel Thompson and Roy
McTaggart.

The
letter said the results of direct taxation were as clear as the solutions to
the current financial problems.

“From
a business perspective, the solutions are clear,” the letter states. “Reduce
your expenses, increase your revenue by encouraging existing and new businesses
to invest and sell assets to reduce your debt. We did not need the Miller
report to tell us that, but it has confirmed the root of our problem as
recurrent public spending and an unsustainable level of debt.”

The
letter said the private sector would continue to do its part to bear the costs
of repairing the country’s finances, but only if government “shows the will and
the wisdom to make the tough choices”.

“This
was part of the mandate on which this government was elected,” the letter
states. “We urge you to stand by the decision that will make a real difference to
all our futures. Say no to direct taxation once and for all, cut costs in a
planned and permanent way, make the changes to encourage business to thrive in
Cayman, [and] show fiscal leadership for our Islands and our region.”

Some
of the 14 specific revenue or cost-cutting suggestions made in the letter
include:

Aligning
the pension and health benefits of the public sector with that of the private
sectors;

Aligning
– up or down – the salaries of the public sector with those of the private sector;

Implementing
planned divestiture of government assets beginning with the Government Office Accommodation
Project and Water Authority;

Implementing
changes in the indigent healthcare programme;

Raising
import duties on cars, fuel and general goods with a commitment to lower them
again when the budget is brought into line;

Executing
the necessary infrastructure upgrades through public/private partnerships beginning
with the landfill; the runway extension; the North Sound deep water channel;
the cruise berthing facility; and a separate new cargo port facility.

“Please
make the tough decisions that need to be made now,” the letter states. “We will
support you, work with you and together everyone will enjoy a better future.”

The full text of the letter and
those supporting it is published on page 3 of today’s Caymanian Compass. The letter invites others to support
the initiative, stating it will be re-printed

TOPPrivatesectorSTORY

A group of more than 100 organisations, businesses and individuals have supported a letter against direct taxation, but which recommends many revenue generating and expense cutting measures, including selling the uncompleted Government Office Accommodation Project, pictured here.
Photo: File
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3 COMMENTS

  1. You know many people will not like me for saying this, but a community fee that is mandatory is needed to support welfare programs, social services, and education in this country. Such a tax is needed for a worthy cause.

    If we cut so many services and the civil servants down to such a degree that we have only a few interacting with the public, that cut will eventually lower the job-performance of the services to the public. How much are we going to cut?

    I don’t want a sustain revenue or tax that will just fill the coffers and pockets of government. But at least, we need a tax that funds transparently go towards helping those who are disabled, elderly, and for educating Caymanians.

    Furthermore, if we rely so much on development to generate revenue for these Islands like the Narayana Hospital, how will that impact our environment. I understand that they need 500 acres of land to clear – that is a lot of land for palm trees to replace! Think of our wildlife and the tourism beauty of these Islands. The East is the only "country" Cayman has left.

    More and more, everyday, I am seeing the need for some kind of a "moral-coded taxation" for these Islands. You in the private sector may disagree with me, but time will tell… not everything is money

    Peace

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  2. We are very fortunate to have a home on Cayman Brac. We spent our honey moon on Grand Cayman in 1976 and dreamed of making our home on the Cayman Islands. The most beautiful islands and people friendly islands in the BWI’s. We were fortunate our home survived Hurricane Paloma in 2008 and with recent recessionary world events and now the environmental disaster with the oil leak in the Gulf of Mexico, I ask the Cayman Government to rethink their position on solar power to power our islands. The Caymans are so dependant on other countries for their econmic well being, that it only seems logical to wheene away from oil as a source for our electric supply. It is against the law to import solar panels and make ones home or business self suffecient. The investors in Brac Power need to be widen their investment horizons to embrace solar or alternatives sources of power. Alternative sources of electric power should not be a threat to these investors but looked upon as an opportunity, before someone else does. Inexpensive, affordable, renewable and profitable alternative energy resources are there. Cut your umbilical cord, grow and be a responsible leader in the BWI’s. Submitted with due respect. Ray

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  3. I entirely agree with your stance Raymond. But CUC will NEVER let that happen. You see, solar energy is only worth purchasing if you have a system that’s tied into the grid. IE, you generate electricity during the day, and use CUC’s electricity at night. The problem is, that when someone generates more electricity than that house needs. CUC must pay for your electricity. CUC will not allow everyone to generate enough electricity that they are not needed anymore. So instead of saying (we won’t pay you for your excess, but you can generate as much as you like, and still stay on our grid) they say you must pay CUC money to generate extra electricity.
    And if the government ever tried to bring in an alternate source of electricity to compete with CUC. CUC would just pack up and go home. How does the island run for 6 months to a year without any electricity at all?

    Old expression "They have you by the short and curlies".

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