With approximately 250 in
attendance, the packed programme at the inaugural summit hosted by Cayman
Finance on 6 May tackled a range of issues either impacting Cayman today or
coming up the pipeline.
While those in attendance happily
took in the issues at hand, most notably developments in tax policy both in
Cayman and abroad, it took keynote speaker, former US House Majority leader
Dick Arney, now chair of the conservative think tank and lobby organization Freedom
Works, to really pump up the crowd.
Driving his point home that Cayman
should take a firm stance against bullying supranational organizations had
guests cheering at least one term not often heard at these types of events.
With Premier McKeeva Bush sending
his regrets, Ministry of Finance Chief Officer Dax Basedo opened the
conference, acknowledging the Cayman Islands Government is taking on
challenging times, using the delay of the budget presentation to continue finding
areas within the public service where it can reduce the 2010-11 budget.
He also spoke of ways the
Government is encouraging investment that stimulates the economy and generates
revenue for government, using as an example the agreement recently signed with Dr.
Devi Shetty for the construction of the Cayman Narayana Health University that
will include a 200 bed hospital.
He also laid out the government’s
attempts to strengthen the Financial Services Secretariat within the Ministry
of Finance, which is working with the Cayman Islands Monetary Authority, Tax
Information Authority, Portfolio of Legal Affairs and the Attorney General’s
Chambers to ensure Cayman’s international cooperation obligations are fully
He also noted the newly-formed National
Investment Council is developing a coordinated economic development strategy
with the short-term goal of driving growth within the sector.
On the international level, he
pointed to Cayman’s efforts to contribute to, rather than merely react to, the development
of global financial services standards in areas like tax transparency.
Kicking off the day’s
presentations, Cayman Finance Chair Anthony Travers provided an overview of
where Cayman finds itself in the international arena, suggesting a number of mischaracterizations
aimed at Cayman were rooted in the hidden agenda of the OECD with respect to
its interest in harmonising global taxes.
He also argued that Cayman’s financial
services industry has to change if it is to maintain its significant contribution
to Government revenues, which has been pegged at over 50 per cent.
Mr. Travers suggested Government
would need to secure greater revenue from fewer transactions for the
foreseeable future. But to justify those fees, Cayman`s financial services industry
would need to improve its quality, or the industry would soon be engaged in a
race to the bottom on fees with more competitive jurisdictions, resulting in
further declines in government revenues.
He also pointed out the demands
from bodies like the OECD for companies to prove substantial presence in Cayman
is vital to the future development of Cayman`s financial services industry.
Taking on immigration, he argued
that policies have been highly restrictive, resulting in the loss of fund
administration jobs in Cayman to other jurisdictions. He argued that by coinciding
with the global financial crises resulting in a decline in transactional volume,
government revenues are being further affected as a result.
Arguing for long term security of
tenure for high quality financial professionals Mr. Travers also noted an
overall loss of jobs as a result of companies leaving for greener pastures was
a loss to Cayman considering the 50/50 expat-Caymanian split in the sector’s
The packed agenda also included
Richard Teather of Bournemouth University, who recently completed a report for
Cayman Finance urging public expenditure cuts over taxation as the solution to
tackling Cayman’s budget deficit. Dan Mitchell of the Cato Institute followed
with a high-spirited presentation arguing the hidden agenda of supranational organizations
like the OECD was to discredit low-tax jurisdictions.
Matthew Jones of the Alternative
Investment Management Association outlined the objectives and political
background to the European Commission’s new Alternative Investment Fund
Managers directive, while Gary Hufbauer of the Peterson Institute for
International Economics took on the topic of the impact of international tax
proposals and their implications for Cayman.
Steven Cantor of Cantor &
Webb’s presentation on the US HIRE act revealed how its Foreign Account Tax
Compliance Act provisions designed to prevent U.S. citizens from hiding their
identities behind foreign corporations, trusts, foundations, and other types of
foreign entities will likely impact Cayman.
Steven Entin of Institute for
Research on the Economics of Taxation then took on the task of clarifying the
ideas behind consumed income and the consumption tax model.
He was followed by the much
anticipated presentation from James Miller and David Shaw who reviewed the
proposals in their recent report undertaken for the Cayman Islands Government offering
strategies for Cayman to take control of its finances through new revenue measures.
Closing out the conference, Jack
Irvine and Kack Quinn of Media House International and Quinn Gillespie and
Associates outlined their lobbying efforts for Cayman Finance in Washington and