Government to impose payroll tax on expats

McKeeva Bush Cayman Islands 300x250
The government will impose a payroll tax for work permit holders making more than $20,000 per annum, Premier McKeeva Bush confirmed today. Caymanians would pay no payroll tax.

Mr. Bush said there would be no cap on the tax; work permit employees have to pay 10 per cent of their salary in tax no matter how high it is.

Although not all of the details are worked out, the plan involves a simultaneous suspension of the Pensions Law for work permit holders. However, Mr. Bush said employers would have no obligation to pay any of the payroll tax.

The effective tax rate of the discussed plan would be 9.52 per cent of their current gross salary for work permit holders if employers pay half. If employers don’t pay any of the money they save from not contributing from their work permit holders’ pension plans, the effective rate of taxation will be 14.28 per cent for salaries up to $60,000.

Leader of the Opposition Alden McLaughlin said instituting a direct tax would have serious implications for the Cayman Islands.

“I’ve never known of any tax that didn’t get expanded or that goes away,” he said. “Once we go down that road, it’s only a matter of time before it expands. This is something no one in Cayman ever wanted to contemplate.”

Mr. McLaughlin said the cost of government expenditures has been exceeding government revenues for some time.

“The trajectory that we’re on… is just not sustainable,” he said. “We didn’t need the Miller-Shaw report to tell us that, but it told us that.”
The problem is spending, not revenues, Mr. McLaughlin said.

“This government, despite all the rhetoric, has done nothing really to reduce the expense of government.”

McKeeva Bush Cayman Islands

Mr Bush
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76 COMMENTS

  1. Seriously??? I can’t even imagine how this would be rolled out and what it might look like. Well I might as well pack up and leave. I imagine alot would follow suit…Welcome to Turks and Caicos…ummmm, I mean Cayman…

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  2. Well I guess McKeeva can’t ever have read the story of the goose that laid the golden eggs …

    Cayman’s competitors in the offshore finance industry must think it’s Christmas.

    Last one out please turn off the lights …

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  3. Yeah, let’s get the ex Pats to pay for the excesses of Government. We all know that ex Pats don’t contribute Anything to the economy!
    Perhaps it’s about time for an ex Pat party to be formed, let’s think of a good slogan…..oh how about NO TAXATION WITHOUT REPRESENTATION! (Well it worked for the Americans)

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  4. JTB
    On the other hand, if such a tax were to be imposed on ALL wage earners, it would be equitable and probably seen as such by Cayman’s competitors in the various offshore industries. But Caymanian voters would not see it as such, would they?
    Although why we continue to regard these as industries baffles me. They toil not nor do they seem to spin (except in the recent sense of the word).

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  5. Payroll tax=less expats=less work permits fees= less money for Cayman. Not a smart move but then again, I’m only an expat – what do I know?

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  6. 10% is a very large number. CI is going to lose a lot of workers over this one. He did not think this one through. The current downward spiral has increased velocity exponentially. Amazing how I thought Government was at an all time low and now it gets even worse. Why not throw in a 100 CID exit and entry fee when we go shopping in Miami.

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  7. Great McKeeva! Keep spending endlessly and pushing out the expats…more empty jobs more empty houses more parked cars Are you even living on this island or furthermore on this planet. Like roll over has not hurt the country enough. Could you just stop your endless spending and blaming it on everyone else and having everyone else pay for YOUR spending mistakes. My businesses have suffered enough under your regime and frivilous spending antics. The Queen needs to put you in time out for at least a couple of years. Taxes what do you call duty? Tax part of the country but not the part who is wasting the money. I suppose next you will impose a health care regime that everyone must take except the glorified government who institutes these ridiculous commands.

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  8. When will you starting listening to the people Mr. Bush???

    You’re not only driving expats away but your own people. I don’t blame the young Caymanians for leaving and finding another job elsewhere.

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  9. No benefits for an expat to stay now. How can you have a person doing the same job as the person next to them but effectively paying them 10% less. Is this not a Human Rights issue?

    Expats will just go and work somewhere else. Not good for the service industry or small business owner on this island. Not good for the island at all. Did Mac even think this through? Plain stupid!

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  10. Since employers would likely choose not to pay a tax if they don’t have to, essentially this is a 14.28% tax. On top of the taxes already paid (stamp taxes on property, import duties, the government taxes that keep the price of gas at 6/gallon, etc.).

    This seems like a great way to encourage expats to leave. A 10% (or 14%, as the case may be) tax increase is substantial. Especially when the people being taxed have no right to vote and do not receive any of the benefits available to Caymanians, who will not be paying any taxes.

    Expats derive a benefit from living on this island, but we pay greatly for that benefit. Cost of living in Cayman is VERY high, and while there are no direct taxes, the government takes in plenty of money from the expats living here.

    One other thing to remember — most people on this island get paid in US dollars. So right off the bat, there’s essentially a 25% tax we all pay based on the difference in the currency of our salary vs the currency of the island. Factor in that the 10% (or 14%) tax would be in CI, and for people paid in US dollars it’s really a 12.5% (or 17.5%) tax. Also, many of us still have to pay taxes in our home jurisdictions, so now we’re being taxed double.

    The obvious next step is this — expats leave becuase of the taxes, work permit revenues go down, and then the government will have to tax Caymanians as well. Be careful when you open Pandora’s Box.

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  11. Stall this madness until the next election…

    And get rid of this madman…

    And call in the Brits to fix this…as best they can.

    The locals have all gone potty on the local brew !

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  12. Wow. Not only a tax only on expats of nearly 10% of their gross salary but also a diversion of the employers’ contribution to expat pensions to government coffers. So what we are really talking about here is somewhere in the region of a 12-14% payroll tax as expats get double whammied. You might ask what they get in return for this hefty tax? Political representation? Nope. Education for their children? Nope. Healthcare? Nope. Such a short sighted move Mr Bush- I only wish that I could vote you out at the ballot box! I will have to vote with my feet instead. My employers who already have to pay hefty work permit fees (in no way comparable to any other offshore jurisdiction) are really going to dislike you when it comes time for my salary review! That’s if they can afford to stay in business here!

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  13. It should be that ALL EXPATS pay this tax its only fair because all the expats I know I know many many send ALL the they can back to the country they come from. They barely spend any here they try fit as many as they can in houses / apartments by CHOICE we Caymanians arent forcing them to do this they share same car,etc,etc,etc.You EXPATS BARELY CONTRIBUTE TO THIS COUNTRY that allows you the chance to come make better lives for you your loved ones back in your countries.so be grateful if u do not like it LEAVE WE CAYMANIANS ARE NOT GOING TO STOP U as a matter of fact I will buy you a one way ticket off my Island. STOP your whinning PAY YOUR DUES FOR ONCE or leave I will not miss you. I say it again TAX EM ALL !!! I cant wait to see the mass exodus !!! Bye Bye oh by the way we CAYMANIANS WILL SURVIVE WITH OUT YOU DONT BELIEVE ME ? GO BACK TO YOUR COUNTRY JUST WATCH US CAYMANIANS LIVE WITH OUT YOU EXPATS

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  14. I am a born indigenous Caymanian. I have watched my island be taken over by expats from every possible culture on this planet for years. You all say its going to hurt the Cayman Islands. I don’t believe it will. You people come here to enjoy not only a tax haven country but to also embrace this beautiful island for the weather, food, culture, people…. and I can go on and on…. If you have a problem with paying 10% salary tax, then by all means please return to where you have come from, poverity stricken, crime infested, over populated, debt-rising countries in which you pay over 22% (in most countries) salary tax (that by the way made you come here in the first place). There are alot of things I do not agree with the Premier with doing (West Bay Road Sale) but this is definitely not one of them.

    Most of the expats that do live in the Cayman Islands, do not spend their money in this country unless it is for the bare neccessities. Example as to where the money is going: Jamaica’s revenue report 2011 stated that over 80% of its revenue came from money transfers in the Cayman Islands. That is over US20 Billion dollars being sent to ONE country. Should I start looking into the US or Canada or the UK for comparisons?

    If you people feel so strongly about not paying 10% salary taxes, then please go home. I’m sure we can find another 30K people to replace you all, that once again have come from a country they have been running from, or from a place where the employment rate NEVER goes down.

    Its bad enough Caymanians have to tolerate these expats who believe they own this island, but don’t complain about something that will help the Caymanians in this country.

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  15. Steve sums is up really well except for be thing, tax treaties will prevent you from being double-taxed. That being said, today is the day I’m starting to plan my exit. Put the house for sale and find a new job in another sunny area where even when taxed, cost of living ain’t so high. Oceans are pretty but the flat rock is not as attractive as it used to be…

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  16. hey pissed westbaya am wit ya lets help em pack !!
    they should be made to pay back taxes for all the they have sent over the years they have been here. why not ? fair is fair !! oh by the way I know we are VERY unpopular with the expats with our comments so what the heck am just gonna go ahead say it (again) My fellow CAYMANIANS SO YOU SAY YOU WANT A REVOLUOTIN ?!?! looks like it soon come Bo Bo !!

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  17. This new proposed legislation is ridiculous. The government should learn how to manage their budget better considering all the tourism, immigration fees, filing fees.

    Time for a change!

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  18. Dear Pissed Westbaya

    I couldnt agree with you more – if we dont like it here we can leave…and we will…in droves. We will watch from afar as you suggest, as Cayman reverts back to the mosquito breeding ground it once was before expats came and made it what it is today.

    As for your offer to pay for our one way tickets out of here…can I please take you up on it? Let me know where I can pick up my cheque.

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  19. The UK want us to balance the books?

    Make cuts in the civil service – it’s very obvious to all!

    This tax will divide the work place and the country.

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  20. This is the beginning of the end for the Cayman model of the last 40 years. It’s already hideously expensive to live here and to fly to and from. We already suffer tax by a back door form in ludicrous rents and food and utility costs. Employers already recognise this is not a competitive jurisdiction hence the onshoring of so many jobs back to other jurisdictions and the expansion of Cayman firms abroad rather than in Cayman. Having a basis with which to compare Cayman shows how vulnerable Cayman is. I’ve lived here for 4 years and have found it on the whole a really settled and united place. Having a tax that singles out expats will result in the following: a lack of expat investment in property and a downturn in local house prices; a reduction in the disposable income of expats resulting in less money spent in local businesses further depressing the fragile economy; a reduction in the overall number of expats on island further depressing rental prices and incomes that can be spent locally; the fostering of divisions between communities, who on the whole respect and value each other. Cayman and Caymanians need to put their best foot forward and entice people and business to come here. You need to have a critical mass of tourism and financial services to remain viable. And policy seems set on driving investment away. Cayman’s competitors surely cannot believe their luck. I sincerely hope this does not become a re-rerun of Bahamas in the early 70’s but i fear that the drip, drip, drip will start to get louder every day.

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  21. To Westbaya and Indigenous – It is quite unfortunate that you post such negative thoughts on expats and somehow think this will help the Island and Caymanians. I am not sure how you get to that thought process but your bubble will be burst if you think that the mass exodus of expats will somehow help. It is truly unfortunate that this Government is ruining this beautiful place. Where is the Governor to stop this mad man?? I do spend a lot of my income on local businesses in order to help support the locals. I don’t buy a home here because it is so unstable but still easily support many small businesses on Island where and when I can. However, if you truly want to pay for one way tickets for expats, sure, many will take you up on your offer – hope your bank account is full.

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  22. The comments of indigenous and Pissed WestBaya show exactly why expats will leave. Every day we face resentment from people whose lives are infinately better because of expats. Do you think Caymanians can run the banking system and the offshore hedge fund industry that brings hundreds of millions of dollars to the islands each year? I can tell you that they can’t, because they aren’t running it now. Can they run the dive shops or the hotels that bring in the tourists and the hundreds of millions of dollars of tourism revenue? They can’t, because they think they are too good for those jobs. When was the last time you saw a Caymanian scuba instructor? Or a Caymanian hotel clerk? Do you think companies like paying the work permit fees? Ever see a Caymanian working at Burger King? Caymanians don’t want these jobs, and even if they did, there’s not enough Caymanians to fill them.

    We expats get a benefit from living here, but make no mistake, Caymanians receive a huge benefit from us being here. As you enjoy your first world lifestyles, remember you’d have none of it without expats. That doesn’t mean you owe us anything, but it does mean that you’re idiots to look on us with resentment. If you think we’ve taken over your island, go ahead and give up all of the comforts and advances you’ve gained over the last 50 years before you complain about us.

    As for Pissed WestBaya’s statistics, do you think that the Jamaicans in Cayman earn 20 billion dollars? Assuming there are 20,000 Jamaicans in Cayman, that means each one is sending one MILLION dollars back to Jamaica. Maybe you’d better hope that we expats pay some taxes to improve the education system around here — your math skills can use some work.

    As for Indigenous’ point that people send money home and therefore deserve to be taxed, what about Caymanians who spend money off island? I know numerous Caymanians who travel to the US for regular shopping trips. Should they be taxed because they are not spending their money here?

    Apologies if this comes off as rude. I have many Caymanian friends and I feel no anamosity towards Caymanians — I typically only feel love. But when the expat hatred comes out, when the you give nothing back to this island nonsense comes out, you have to react to such hatred with a bit of rudeness and anger to make your point.

    But like I said below, be careful what you wish for, Caymanians. If you’re rooting for us to be taxed, you’re setting a dangerous precedent. Government can’t control it’s spending, and soon that 10% tax will go to 20%. And soon expats will leave. And then the government will tax Caymanians, and there won’t be any argument that this is a tax free nation anymore. Open the door to taxes and soon enough you’ll be paying them. It’s that simple.

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  23. Given that this government has also signed away so much future revenue to the Dart group and proposes to give away so much more to the Chinese and anyone else who washes up on our shores, it seems inevitable that if this proposal goes ahead then everyone here will soon be paying far more than 10% tax to keep the politicians in the style they like. I say to the Premier collect the duty owed on the Ritz construction, stop living like a prince, stop wasting money, and balance the budget by spending less.

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  24. I checked the date and it is not April 1st, so I note.

    Expats seem to be will represented in their comments
    to the UK and every time policy is discussed here.
    Matter of fact Caymanians may elect their leaders, but who help leads the leaders stand well represented.

    When the Governor, the Premiere and the police chief speak of acting on civil concern, I am sure a high percentage is based on media point and comments they gleam.

    Ask the green card holders in the US if they can vote, then ask the IRS if they don’t collect taxes from these same residents. Only citizens are allowed to vote and you know it.

    I still have to pay my taxes in the US from income earned there, and on income earned here too if I fell within that tax bracket..

    Ask the drafter of the Alaska Permanent Fund, their intent and motivation.. Similarly, Caymanians has invested their island as a platform for earnings, good earnings for many Expats.

    For those who would leave, please tell your buddy there is a job in Cayman if he is willing to pay 10% tax; see how quick your buddy rolls, as they LOL.

    The Governor has presented a white paper on sustainability, the Premiere has came up with an interesting way for users of our island platform to give back, and the Police Chief are running criminals in like never before. There must be a team working somewhere to see all this teamwork!..

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  25. Is Mr Bush insane, short sighted or just not very bright?

    Please think about it!

    Firstly the reason most expats are on the island because they are bringing key skills to the island which assist local businesses prosper and grow, these businesses are either owned by Caymanians or have a Caymanian partner, in doing so they create employment for Caymanians.

    In addition if all the expats left the island spending on the island will go down, it’s a myth that expats do not spend there money on the island, this again will damaging local businesses, further more you would also have a lot of empty houses which Caymanian owners wouldn’t be able to rent out, this in turn will drive down the rental prices across the board.

    I have been considering moving to the Cayman Islands but currently working in the UK and paying taxes and one thing you should all think about is the UK tax payer pays a high rate of tax which in part goes to subsidise the Cayman Islands. Perhaps the UK should stop subsidising the Cayman Islands and as some of the Caymanian community love their island so much and feel so strongly about expats leaving, they can then pay tax themselves in place of the expats!

    Either no one pays tax or all pay tax! No discrimination!

    In my opinion tax should not be implemented as you will discourage key skills coming to the islands, if the key skills leave you will then have a poorer economy and all Caymanian islanders will end up having to pay tax anyway as they will be the only ones left!

    The solution is simple, MR Bush needs to do his job properly and get the spending under control.

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  26. Anyone ever consider that Grand Cayman is top heavy with acountants and lawyers who specialise in limiting their clients exposure to taxation.

    They are going run rings round CIG over this plan.

    By the time the dust settles this little scam is going to cost the people of the Cayman Islands a lot more money than it can ever raise.

    Does anyone even know how many more specialist civil servants and consultants are going to be needed just to set the scheme up?

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  27. The Royal Gazette in Bermuda has already started a story on this, which they will run in Bermuda. Funny, if anyone in Cayman read the Royal Gazette, they would know a similar strategy employed by the PLP govt there (increasing payroll tax from 14% to 16% without discussion with businesses) was a significant contributor to many companies and jobs leaving the island…which is still happening today.

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  28. Pissed WestBaya, If you think that this will help Caymanians you’re living in a dream world. Hope you don’t own any rental properties because if you do good luck paying your mortgage when you can’t get any renters or the rate drops by half.

    And Indigenous, the folks you talk about living packed in houses aren’t going anywhere, they don’t make the 20k. The folks that will leave are those of us who spend real money here and invest here. Watch real estate values drop tomorrow just on the threat of this poorly thought out policy.

    Watersedge is spot on if you agree with this tax, you have no idea about the Cayman economy.

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  29. I see some Caymanians are happy about this. I’m a Caymanian and I actually have the sense to look ahead and see that… CAYMANIANS ARE GOING TO START GETTING TAXED.
    It may be less than the 10% but it’s going to happen. The expats are going to stop coming to Cayman for one, and two, some may leave… and Cayman will STILL need money and the only other place to get it at that point would be from the Caymanians. So don’t be all proud and happy about this because we are next. Common sense isn’t very common.

    The plus side is that Cayman Airways and other airlines are going to have a boost in sales as the expats leave. THEN the government will still need money and realize that the only people left to tax is the Caymanians. Therefore..

    Dear Fellow Caymanians,
    don’t get too excited. Think about it logically and you’ll see that we are next. Sincerely, Another Caymanian.

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  30. So McKeeva Bush is planning a payroll tax on the highest earning professionals in Cayman…but not their employers, the corporations that hire them.

    And is excluding the highest earners in the local population, both public and private sector ?

    Because only a payroll tax on the highest earning workers in the Cayman Islands would make any of this make sense, given the cost of living in Cayman…and…in Cayman..CI20,000 pa is a chicken feed salary.

    No…this man has gone certifiably insane !

    No thought of the human rights issues under ECHR statutes…no thought for the increase in levels of crime when Cayman’s entire economy plunges into a chaos even worse than my adopted country, Jamaica, suffered some years ago.

    No thought for anyone but his selfish aims and motives…which obviously is now independence from the United Kingdom.

    Under international law, Britain could never allow discrimminatory taxation in Cayman; if direct taxation is to be implemented, all must pay taxes…or none at all.

    Is there any chance of charging this man with treason while Cayman waits for the next general election ?

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  31. CayCompasses next update: Caymanians to pay payroll tax!

    Let’s see how much people love McKeeva and his good decisions then. Let’s see how much he is looking out for fellow Caymanians

    Come on now.
    It’s going to happen sooner or later and we can obviously see its now sooner rather than later.
    By him doing this now to the expats is sort of like him… lessening the blow for Caymanians when you find out you’re next. So thank you for that Mr. Bush? I don’t know lol

    Prepare from now people. 🙂

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  32. If the division between Caymanians and Expats wasn’t already wide enough it just got a whole lot wider.
    The ignorant ones will embrace this thing in droves. The intelligent ones will not but they are way outnumbered.
    He may be mad but he is not stupid. This thing could actually get him reelected. Fueling the hatred towards expats is very bad for business. There are plenty of jobs here for the locals. You have a choice and clearly you have made it easy for expats to fill those jobs you do not want.

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  33. This is a very bad idea…, and may be a tipping point for both some folks at the lower end of the salary scale due to not being able to survive a 10% cut in pay and for others on the high end for simply being able to save 10% by taking their job elsewhere.
    Note to Bobo on the comments about living in paradise, your cuisine and culture are not exotic and there are plenty of islands in the caribbean with warm clear water and nice beaches!

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  34. I have lived here two years as an expat

    I did not budget to pay a 10 per cent tax and will be simply happy to leave cayman

    So as the expat population dwindles MB can play his fiddle

    It’s sad to see such a country spend it’s way to disaster

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  35. caymanian-on-guard True Green Card holders pay taxes but so do citizens, it’s a red herring to compare the Bush proposal to US policy of taxes on immigrants.

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  36. Ex pats don’t vote…..ergo Bush has no worries on getting re-elected – in fact I am sure he is using this proposed legislation to garner votes. No doubt it will be popular with the voters at large. Far more so than reducing the Civil Service (which of course is largely Caymanian and represents 1 in 8 of the total population). Self preservation is his order of the day…..God help us.

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  37. Bush is drilling holes in the bottom of a sinking boat to let the water out. This astounding stupidity on his part is only going to shred the budget faster.

    Hope those schools he forgot to pay for are really good Cayman is going to need a lot of very smart people to run the dive shops after all the other businesses leave in disgust.

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  38. 10% thats a lot…expacts makes things possible here at the island…you know how expacts works…we better go home to our dear country and lets see want will happen to cayman if you impose yhat payroll tax

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  39. Is it too cynical to wonder how this tax will be collected? And who will head whatever agency is created to administer it? Maybe China Harbor has a tax collection subsidiary that can make a large donation to Mr. Bushes church?

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  40. To Pissed off Westbaya and Indigenous. You don’t seem to have a clue what you are talking about and Indigenous your grammar clearly shows that.
    Lets hope you are not or never will be employed by and expat company that keep this island going and I think the whole argument is that if bush is going to introduce tax to the island it should be across the board for everyone to pay for there heavy spending. Bush is just showing his true colors towards expats. We didn’t only pay for a pension her in Cayman that expats could not benefit from as they will not be allowed to retire here but now we are the made to pay for a tax and have little benefits for it.

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  41. we all know how expats work…you think if caymanians fill up all the works of the expats that will leave the island when the government imposing that 10% tax lets see if the caymanians will work last…

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  42. Wow, Income Taxes in the Cayman Island who would have thunk it, but I knew it was just a matter of time. I can’t wait to what Ezzard has to say about this. Doesn’t sound fair that it will only be levied on Expats, I’d keep an eye out for Human Rights and discrimination suits. One thing I’d like to say to all those who say they wish there were no expats or wish they would leave, please remember that if it wasn’t them it would be you that was getting hit with these taxes.

    I think some will leave but some will not because even with the tax Cayman may still be better than where they came from. I does seem a little unfair to tax someone who can’t even send their kids to a public school.

    A question for Pissed WestBaya, you say the 80 percent of Jamaica’s revenue came from money transfers in the Cayman Island, are you saying that Jamaican Expats sent 20 Billion Dollars home in one year, if so they must be making a lot of money.

    I’m sure just this announcement will get Bush a lot of Brownie Points form the anti expat crew. But I am curious as to how this is going to be implemented is Cayman going to open its own version of the IRS. It may be popular among locals at first but when the CI-IRS get their feet grounded they will not limit themselves to Expats, once the Tax monster rears its ugly face not only will Caymanians eventually get taxed especially if a lot of expats leave , but property and school taxes will follow.

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  43. If you ask me, 10% is not that much. But the reality is that the a lot of expats won’t be able to pay that amount of money to the Government. It’s true that CI is a paradise in compare with some of their countries, but in other hand is not that comfortable when you have to deal with some Caymanian that are extremely rude, that simply hate expats, and on top of that are lazy and don’t want to do a thing but complaint about the expats taking their
    jobs. I lived that with some of them and to be honest it wasn’t worthed. With this new law the only thing I can see to come is a lot of bussinesses closing their doors due to lack of hard workers who really can go the extra mile to keep their bussinesses open. The reality is that most bussinesses in Cayman don’t want to employ their own people because most Caymanian are extremely lazy.

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  44. Caymanians do not be fooled.
    The UK Government still have to approve this.
    MAC know they will say it creates equality and you have to charge all the same tax. He will then impose a 10% tax across the board and blame the UK.

    The Government of Gibraltar tried something similar of charging locals and foreigners different rates of tax and the UK put a stop to it.

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  45. I think everyone is missing a huge issue with the tax on expats.. those small companies that hire expats even below 20,000.00 will have to have audits to insure all are following the rules. Caymanians with small businesses think long and hard before you agree to this. It might sound like you may save 5% but you will be spending much more than that on accounting fees. You might want to consult the many Expats that are familiar with the process what it will mean for you.

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  46. I dont know where you get the 10% tax from. Read the following: If employers don’t pay any of the money they save from not contributing from their work permit holders’ pension plans, the effective rate of taxation will be 14.28 per cent for salaries up to 60,000.
    So basically all the money the employer was putting into your pension now goes to the government, PLUS 9.52 percent of your salary.
    Now you are down 14.28% from what you were making, and you have to come up with another 10% from your salary for your own Pension saving.
    Sounds like I am not going to be spending much of my money in a country that already has exorbitant duties.

    Editor’s note: What you state is basically correct, but contributing to your pension account would no longer be mandatory. You could instead decide to invest for retirement in a different way or to a different level other than 10%, or you could decide not to save for retirement at all.

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  47. Mr. Markoff, could you or your associates contact Dr. Devi Shetty and ask what this means to his commitment to Cayman’s Medical Tourism Project? Many residents have real estate investments that have been hammered by global setbacks and now are concerned that Mr. Bush is about to create a homemade value disaster. The previous government is largely responsible for the deficit burden but this leader has magnified rather than relieve the problem. Before there is a panic run from this island, leadership must step in and calm the turmoil this policy protends.

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  48. won’t happen, who will collect it and how will they know what to collect? what about dividend payments, payments to umbrella companies etc….never gonna happen, this government can’t organise their own packed lunch

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  49. I have always felt that McKeeva was the lesser of two evils when it came to supporting a political party, so I always supported his government over the PPM. Generally he has always been more pro business, pro development, had more ideas (some good, some bad) and encouraged ex-pats and foreign investment as much as possible. PPM on the other hand, while seemingly more transparent, had no new ideas whatsoever, would not encourage investment, was very anti-expat in their attitude and policies (hence the rollover policy that McKeeva has slowly cut back on) and generally lazy. I think they based their policies on uneducated morons who call into Cross Talk everyday.

    With that said, this is by far, the stupidest proposal I have ever heard from any politician, and I can’t beleive I am hearing it from McKeeva. I read the entire comments section here and aside from a few ignorant Caymanians who are an embarassment to the rest of us, (yes, I am a Caymanian) most people are spot on with their comments, and how devestating this would be for everyone. I am proud that most Caymanians are not in favor of this, so if this was a ploy to earn brownie points with the Caymanian voters, clearly this has backfired.

    Alden and the PPM party must be drouling over this, b/c if McKeeva is serious about implementing this tax, I for one, will be switching my vote next election.

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  50. For those people who are on term contract – say they just came here a month ago with 2-year contract – will this constitute enough reason to get off the contract? For those people it’s like a rule change in the middle of the game. Because 10% is high enough rate to turn any kind of personal 2-year cash projections into waste. When I was coming here, the budget was so tight, that 10% would make me run like hell from this island.
    Another point which is not clear – why taxing the same thing twice through? It just increases the cost of administration.

    There is already tax on expats in form of work permit fee. If now you want to do a payroll tax, you’ll have to create pretty large tax
    service department.

    Another question which I had is how is it going to affect Cayman Enterprise City? Are they getting around this too? Why?

    Another one – if you compare these Islands to living in US – you already pay like 20-30% on consumption. Add up 10% on income, and you have come up to the same tax burden as in US, just slightly differently distributed. What’s the point?

    Long term consequences, everything readjusting a little:
    1. Some international businesses will leave.
    2. Some employers will have to raise salaries.
    3. Long term rental fees will have to go down.
    4. Population will decrease.

    For me personally – 10% is significant enough to get into deep thinking process on where I want to live and work.

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  51. Tourists often complain that Cayman is sooooo expensive, this tax will push the operating costs of tourism related businesses up by the corresponding percentage, that will be passed on to the Tourists, then Cayman becomes TOO expensive and unlike the expats who can’t vote and the Caymanians who don’t bother (Referendum anyone?), Tourists will vote with their feet.

    In companies, decisions like this result in brightsizing, not downsizing. The smartest guys always grab the first parachutes.

    Political decisions in the USA have already eroded the Cayman ‘Tax Free’ advantages. Push the costs further and Cayman will go the way of the rest of the world, with Finacial Services companies operating a ‘Flag of Convenience’ Cayman address and answering phones from a call centre in Dehli (At least they can keep the power on over there 🙂 )

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  52. The slow and steady downward swirl of this nations economy is about to experience the true depth of the Cayman Trench.
    In many MBA programs they look at examples of how not to do things. This will surely be a prime example of how not to fix an ailing economy.
    Back to basics, spending equals revenue. Give the Auditor General full reign to reel this one in, because no one else in the CIG has a clue.

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  53. liberalkman, I share you sentiments, but you are another one of those ignorant commenters. For your information, if Alden was in McKeeva’s shoes, do you think he will refuse a budget of what the UK wants? McKeeva may have choose a tax for these islands, but this straight, the UK DEMANDED he select one. Read the article again.

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  54. The expat tax law is discriminatory and under the Bill of Rights that comes into effect in November, an independent judiciary should prevent its implementation.

    If prevented from implementing this discriminatory tax, Bush will have to implement the tax across the whole Cayman population. As alluded to in an earlier comment, Bush will then blame the UK Govt for imposing tax on Caymanians.

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  55. My Complaints about Bush have been few and far in between. But this is simply a play for political gain, I am sure he knows this will not fly but what it will do is gain a lot of support from those who cast votes, which are not expats and actually outnumber the business owners that vote. He will drag this out until after he is reelected and then drop a bombshell on Cayman that the UK has forced a tax on the entire community.

    This is all part of next year’s Campaign, I don’t doubt for a minute that there will be taxes, but it will not be on only Expats. There will also be a school tax soon, because those mega schools will cost a lot to run.

    This is a direct result of the lack of new revenue generating businesses and the super high cost of government, but what tipped the bucket where those super expensive schools and that fancy Government Administration building, both of which Cayman could have done without or did in a more reasonable way, that money should have went to doing something about the GT dump like WTE and building highways that Cayman needed, if it had been, there would be no need for the For Cayman Investment Group or the upcoming income taxes ops I mean Community Fees.

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  56. Truth: Cayman, like some other countries, has an Over-sized Bloated Government that cannot be sustained as is, so – instead of cutting 500 Over-Paid Under-Productive jobs (of MB’s cronies, family, friends and vote-supporters) he’s passing a law to unfairly tax 20 000 other hard-working people.

    Once a tax has been implemented, it’s SO easy to just raise it every other year or so… 10% becomes 12, 12% becomes 15, etc. And guess where all the businesses who deal with business in Cayman go to? – to Other tax-havens where the cost of business isn’t as exorbitant.

    SO the ones who pay tax can’t vote, and the ones who vote don’t have to pay tax…
    Amazing – anyone else ever heard of such a system ever having been allowed to operate in the world?

    And the additional tax for employers to hire Caymanian Dishwashers..? Surely IF there were enough Caymanians applying for this sort of job, no company in their right mind would’ve hired expats for it anyway (due to WP fees, etc.) – will this tax on well-run companies (as opposed to badly run FAT government agencies with NO accountability) actually change WHO is willing to apply for these kinds of jobs? I think not…

    I don’t believe in a Them and Us mentality – not here in Cayman where people from all over the world have merged together pretty well since the first human stepped foot on this island – but Bush is making it so. Basic ‘DIVIDE and conquer’ politics, anyone? MB knows he’s losing support so this is a last ditch effort…

    Save us from ourselves…

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  57. @Pissed WestBaya indigenous
    Your myopic way of looking at things is exactly what’s wrong with this country. First and foremost MacK cannot selectively choose who to tax. It has to be across the board. Targeting expats only is illegal and I can guarantee you no sane court will uphold such blatant discriminatory decree. Secondly, the notion that expats send all their money abroad is misplaced. I have been here 2 yrs now, my family is here and I don’t send money anywhere. Between paying school fees (yes expats are mandated to put their kids in private school), and daily living I have none to send anywhere even though my salary is in the six figures. If you think Canada’s economy (the most stable in the G7) is sustained by a few dollars sent home by 6,000 of us you need your head examined.
    Thirdly, your line of thought really borders on hate speech where I come from. Don’t cut your nose to spite your face. Hounding expats away may sound like a good idea now but wait till domino effect starts to kick in; empty rentals, businesses, etc. This short-sightedness reminds me of a person who, in minus 40degree weather, decide to pee their pants in order to get warm. It’s momentary, and watch out when the real cold catches up with you.

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  58. Just composing an ad. for Friday Compass Job Vacancies……
    Ex Pat wanted – Salary 15,000 a year plus 100,000 car allowance……

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  59. It’s very sad, but those of us who have feared, but hoped that Cayman would not follow the path of some other Caribbean countries, the path of political development and self-aggrandising politicians, are now seeing our fears realised.
    A nation divided cannot stand. Mr Premier Bush is hastening us on the road to division; and claims he is divinely inspired, what’s more.
    There are, sadly, too many examples of countries and their leaders, not only in the Caribbean, who have rushed headlong down this Gaderene path.

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  60. Bodden,
    Please quote the above article where it says that the UK is DEMANDING McKeeva select some form of taxation on Cayman. You asked me to read the article again; did you even read it the first time?

    The ignorant Caymanians I was referring to were Indigenous and Pissed WestBaya. Their prejudice comments clearly show them for the bigots they are. Sadly, many ex-pats feel that the majority of Caymanians share their prejudice opinions towards them, so I was glad to see 350 disagreements to only 20 agreements in the comments rating for Pissed Westbaya. I bet you were one of the two that agreed with Indigenous. Judging by the grammer of your post, I can clearly see why.

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  61. How about a word tax on the elected officials. Each sentence would have its words taxed at say 10 cents each which would show who is most generous with words while others would be more conservative and speak a lot less.

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