Link to pensions mooted
The plan being discussed involves a suspension of the Pensions Law for work permit holders and the paying over of their current pension contributions – theirs and their employer’s – to the government.
The effective tax rate of the discussed plan would be 9.52 per cent of gross salary for work permit holders. However, it is not known if there will be threshold salary under which work permit holders wouldn’t have to pay.
Additionally, since pensions are only mandated for the first $60,000 of salary, it is not known if those making above that salary would have a further tax liability.
On the Talk Today radio talk show on Tuesday, Premier McKeeva Bush said he would address the country sometime today about the budget.
On the Rooster Crosstalk radio show Wednesday morning, Leader of the Opposition Alden McLaughlin spoke about what he had heard.
Discussing the issue later, Mr. McLaughlin said his sources were “absolutely reliable” inside of government.
“I know they’re considering it; I don’t know what they’ll do,” he said.
Mr. 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.”