Government announces expat tax

Pension contributions involved

McKeeva Bush main

Premier McKeeva Bush said Wednesday that work permit holders who earn more than $20,000 per annum will have to pay a 10 per cent payroll tax.

Mr. Bush, who called the tax “a community enhancement fee”, said he did not want to impose the tax, but he had no choice because the United Kingdom was demanding a sustainable budget.

“The [Foreign and Commonwealth Office] insisted that the Government strengthen its fiscal position by implementing a greater level of expenditure reductions than had hitherto been made by honourable ministers and senior civil servants. The concern is to make expenditures more sustainable going forward into future fiscal years,” he said in a statement. “The FCO is also of the firm view that the strengthening and improving of fiscal results for the Government must not occur solely as a result of reductions to expenditure, but revenues of the Government need serious enhancement and expansion.”

With regard to expenditure reduction, Mr. Bush said the government had already made “extremely deep cuts to get the budget to the stage it is.

“This still did not produce enough savings to satisfy the FCO,” he said. “There have been calls to have significant layoffs – in the range of 500-700 – in the civil service from the private sector. Neither the governor nor the deputy governor has come with any such plan and Government could not have accepted it anyway.”

Mr. Bush said the government had a choice of revenue measures to choose from.

“We could have introduced income tax, property tax, Value Added Tax or something softer such as the Community Enhancement Fee,” he said. “Government has opted to introduce a Community Enhancement Fee that is linked to the remuneration level received by work-permit holders in the Cayman Islands.”

The tax is to be implemented during the 2012-13 fiscal year.

Mr. Bush said that the government recognized that the implementation of the new revenue measure must not stifle Cayman’s economic growth or make the cost of business unsustainably high.

“Accordingly, Government – to mitigate the effect on employees of introducing the Community Enhancement Fee – will introduce legislation to make optional, the present mandatory requirement for non-Caymanian employees and their employers to contribute to pensions. At present non-Caymanian employees and their employers each contribute 5 person of the employee’s remuneration, to pensions,” he said. “This is a real reduction in the cost of doing business in the Cayman Islands.”

Although employers will no longer be required to contribute to the pension plans of work permit holders, Mr. Bush said they would not be required to pay any of the payroll tax, adding that they could contribute to it “if they want to”.

Pensions are only mandated for the first $60,000 per annum of salary, but Mr. Bush said the payroll tax would be applicable to the full amount of a work permit holders salary no matter how high it was.

With regard to existing pension accounts, Mr. Bush said he didn’t know at this point if work permit holders would be required to keep those accounts open.

“No decision has been made on that depth of question yet,” he said.

Should employers choose not to contribute anything toward the employee’s payroll tax, the effective tax rate of the plan would be 14.28 per cent of gross salary, up to $60,000 per annum. For example, a person making 50,000 per year would have had a gross salary of $52,500 when adding in their employer’s pension contribution. If the employer no longer contributes to the pension plan and doesn’t contribute to the payroll tax, that person would see his net salary drop by $7,500 – or 14.28 per cent. That rate would be the highest of Cayman’s main offshore financial centre competitors.

However, should that person’s employer either continue to contribute five per cent to the pension plan or contribute that five per cent toward the payroll tax, the effective tax rate would be 9.52 per cent.

Mr. Bush also announced two other revenue measures including a five per cent fee “on certain categories of employment” payable by businesses.

“This will serve as a further incentive to hire Caymanians in those roles,” he said.

In addition, Mr. Bush said the government was seeking to “introduce a fee to enhance the regulatory environment in respect of the funds industry in the Cayman Islands

The idea of a payroll tax on work permits only was first considered by the United Democratic Party in the early days of the current administration, which began in May 2009. In a first draft report dated 11 September, 2009, the Economics and Statistics Office looked at a “proposed payroll tax for the Cayman Islands” that was also aimed at work permit holders only and compared it to payroll taxes in other regional island-states. However, the other jurisdictions looked at all imposed payroll taxes on all their residents.

“Based on current research, payroll taxes that have been legislated in other countries are nondiscriminatory with regard to nationality of employees based on the principle of equal compensation for the same level of productivity regardless of nationality.”

That earlier plan was not linked to a suspension of work permit holders’ pension contributions and was proposed to be paid half by employers and half by employees.

Mr. Bush said he believed work permit holders would still want to live and work in the Cayman Islands.

“There’s no racial tension here; people can own as many vehicles as they want; they can own property; they can buy their own home; and there’s no other kind of taxation,” he said.

Mr. Bush said he didn’t think businesses would want to move to other jurisdictions either.

“We have first class infrastructure here,” he said. “None of our competitors are in as good a position as us.”

On the Rooster Crosstalk radio show Wednesday morning, Leader of the Opposition Alden McLaughlin said he had heard the government was considering the tax.

Speaking afterwards, Mr. McLaughlin said instituting a direct tax would have serious longterm 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.”

Mr. Bush, however, did announce some expense reduction plans for the upcoming budget, including:

• The requirement for any newly recruited Civil Servant to contribute to pension and health-care costs;

• The requirement for existing Civil Servants to contribute to their health-care costs from their remuneration;

• The requirement for spouses of Civil Servants who receive health-care coverage from the Cayman Islands National Insurance Company to pay for the coverage;

• A $1.5 million reduction of marketing and public relations expenditures;

• The planned reduction to housing allowances to levels that existed before Hurricane Ivan, which is expected to result in an expenditure reduction of $1.5 million;

• Salary reductions in statutory authorities, which is expected to create expenditure reductions of $1.5 million;
• The centralisation of the procurement of utilities, consumables, janitorial costs and security costs, which is expected to reduce expenses by $1.3 million;

• The sale of the police helicopter because of high operational costs, which is expected to save in excess of $1.7 million.

 

To read the complete statement from the Premier, please click here.

 

Conversation continues here 

McKeeva Bush
Mr. Bush

65 COMMENTS

  1. Consider expat receiving CI 60,000 per annum. Of this amount, CI 3,000 per annum goes to Pension fund. The same amount is paid by employer. As Pension fund, is, in the end, part of remuneration, person effectively has annual salary of CI 63,000.

    After this measures are introduced, there will be no pension funding, and there will be 10 percent cut by tax. So the effective annual salary will get to CI 54,000. This is 14.28% down, as mentioned in the article.

    At the same time cost for business went down from 63,000 to 60,000. But based on economic laws it would not work the same. Most likely, the burden will be shared. I don’t see long line of expats waiting for opportunity to work in Cayman Islands (numbers were dropping as I know), so we can assume that current salary level before introduction of tax is somewhat reasonable. So the new equilibrium will be found somewhere in between:

    1. Workforce will drop, leaving only those, who can align with idea of losing 5-8% of their salary.
    2. Businesses will have to increase salary by 5-8% to make up a difference, or shift personnel to other jurisdictions, or leave at once.

    So most likely both things will happen in parallel – cost of doing business will rise and benefit of working in CI will fall.

    The big question is how close are international business to break-even point – by break-even point I mean how much longer are they willing to pay inflated salaries here in Cayman instead of moving staff somewhere else? Looks like we are soon to find out.

  2. The downward spiral has just accelerated exponentially. The implosion of this islands economy is imminent. What part of spending equals revenue equation escapes you? A fool and his money are soon parted.

  3. I understand this will be a tax on private sector employees only. Ex-pats who work for the CI government will be exempt.

    So those employees whose salaries are already paid by the working public will have a free ride.
    Well at least we wont see government employees leaving!

    Caymanians beware! If you read history you will find that income tax was first introduced in the USA after a war as a temporary tax at a low rate.
    As the ex-pats leave and businesses they worked in close down you will be targeted next.

    The major attraction of working here for most ex-pats has been the lack of direct taxation.

    Not only is this a complete break with the past, it will also mean that private sector ex-pats will now need to submit tax returns.

    Of course ALL ex-pats will need to submit them, even those earning less than 20,000 per year, to show they do not owe taxes.

    There will have to be penalties for submitting false returns and how often will the tax be paid?

    The so-called saving from eliminating the need for ex-pats to have pensions is deceptive.
    Pension contributions made eventually go back to the employee, this new income tax will just be wasted by the government.

    In all, a disastrous idea for Cayman.

  4. the main reason ex-pats are drawn to Cayman is because there is no taxes… everyone i have talked to is outraged with this and like me are going to leave if this is passed.
    In an economy that is basically run with ex-pats money, imposing a tax is economic suicide!
    Adding 10% on top of an already high cost of living will be the tipping point… I personally have already listed both my properties for sale cause if this passes i will never be able to sell them or rent them.

  5. We could have introduced income tax, property tax, Value Added Tax or something softer such as the Community Enhancement Fee,

    Community Enhancement Fee = Income Tax!

    What’s the difference?

  6. Oh, but the Community Enhancement Tax is softer, meaning Bush lands in a field of cotton while all the expatriates fall on a bed of nails.

    Make no mistake, Cayman, this is the Final Straw in the is it time to leave? coffin for many contributing members of society. The anti-expat sentiment that has been bubbling since the rollover was instituted has just boiled over.

  7. I’m a successful finance guy but with this possible upcoming legislation, I seriously would leave the Island before the end of this year.

  8. One thing this will help accomplish is that it may encourage a lot of expats to leave as well as foreign businesses. This will in turn flood the real estate market with homes for sale which will in turn drive the values and prices down. Caymanians might be able to buy these home cheaply but have no one to rent them to so they will only buy what they plan on occupying Which will only be a fraction of the homes available.

    On the flip side of this as the expat population dwindles as most Caymanians want anyway, so will Government revenues from work permit fees as well as the Expats Income tax. Which in turn will encourage the CIIRS to point there arrow at the Caymanians especially since the infrastructure for collecting taxes will already be in place which by the way will cost the CIG plenty to setup, new staff, computer systems as well as consultant fees.

    I personally do not think this will fly because whether he calls it a community enhancement fee or not it is still direct taxation. And they will not be allowed to only tax expats in the long run it will mean taxes for everyone.

    This may end up helping the desire for Cayman to be for Caymanians only, but it will not be free..

  9. One thing this will help accomplish is that it may encourage a lot of expats to leave as well as foreign businesses. This will in turn flood the real estate market with homes for sale which will in turn drive the values and prices down. Caymanians might be able to buy these home cheaply but have no one to rent them to so they will only buy what they plan on occupying Which will only be a fraction of the homes available.

    On the flip side of this as the expat population dwindles as most Caymanians want anyway, so will Government revenues from work permit fees as well as the Expats Income tax. Which in turn will encourage the CIIRS to point there arrow at the Caymanians especially since the infrastructure for collecting taxes will already be in place which by the way will cost the CIG plenty to setup, new staff, computer systems as well as consultant fees.

    I personally do not think this will fly because whether he calls it a community enhancement fee or not it is still direct taxation. And they will not be allowed to only tax expats in the long run it will mean taxes for everyone.

    This may end up helping the desire for Cayman to be for Caymanians only, but it will not be free..

  10. Caymanians, please do something about this man.

    Aside from all that stupidity about the 10% tax, there are proposals to save a million dollars here, and a million dollars there – why not just stop doing really dumb things, like spending vast amounts of money on schools, where half of the money is wasted on contract disputes, shoddy design and/or shoddy building.

    Also, get rid of some of the freeloading civil servant jobs. How many people does it take to pass a piece of paper from one person to a photocopier and back again?

    Tax patties too. That is all.

  11. Also, regarding the comment yesterday, could the last one out turn off the lights – that will take care of itself, if CUC are still running the show…

  12. If you need a retirement fund, then work longer hours, harder and with efficiency like your grand fathers and grand mothers. Take chances and risks. Why would you be different?

  13. Time the So Called Government was looked at closer ,how stupid are the Caymanian people ,all this tax is going to do is to drive much needed money and skilled people from Cayman,isn’t the island in a bad enough state as it is with businesses closing and people selling up where they can and leaving,probably the final straw for a lot,between greed crime and stupidity ,carry on Cayman and see where it gets you,as for gaining 50 million for the Government purseare you sure it goes in the Government purse.Cayman you need to find some other way of helping your island out! I really don’t think this is the answer!!

  14. ilovecayman, so you’re saying that previous generations were harder working, more dynamic, efficient and less work-shy. Can I see your evidence that you base this on?

    As far as I am aware, human nature doesn’t seem to have changed dramatically at any point in history.

    Tax patties!

  15. So let me understand,..

    The tax payers don’t get to vote and the voters don’t have to pay tax.

    Am I missing something?

    Guess what, next year, I vote to increase taxes! Wow that’s an easy way to help my budget.

    Cayman,… Nice place to visit but why would I want to live there?

  16. Cayhugs, your question is a very naive question. The Governor has already made his say. He is appointed by the FCO and stand along them. They together want a SUSTAIN BUDGET and that means Tax.

    I hope that answers your question of where the Governor is.

  17. Question …

    What do the Expats get back for paying tax ?
    Free Health insurence, Unemployment benefits, …

    Is it even legal to impose a tax to one part of the population and not to the other? I mean seriously… can anyone confirm if this is leagaly possible?
    Must be a few lawyers out there 🙂

  18. BTW in return for my Fee, what part of the Community will be Enhanced and how? Presumably only Ex Pats will be allowed to have the use of this enhancement, as they are the ones who have paid for it?

  19. Another thought – flat rate untaxable minimum leads the the following:

    – low income foreign workers are hurt less by this
    – high income multi millionaires are hurt less by this
    – medium income professional foreign workers are hurt more

    flat rate favours rich people, untaxable minimum protects low income people.

    So the message is – let’s drive medium income professionals out of here? I’ve followed the subject and heard opinions of locals that big problem is low income workers from low income countries who earn money here, dwell 10 people in one bedroom apartment and send all money they can back home. They don’t spend money in Cayman and they are not so useful to economy and drain money out. To the contract, medium income professionals are those who really live here, pay reasonable rent rate, visit restaurants, do stay-cations and so on so forth, spend money here, fueling economy.

    So who is this law targeted against? The whole idea was to get the money from somebody – so they picked those who are less protected. Businesses can stand for themselves, caymanians can stand for themselves. As for foreign workers – being well-behaved guest you have only to options – stay or leave.

  20. To all International Business in the Cayman Islands that will have to pay the new 10% Payroll Tax. Come to Bermuda and enjoy the Sun and Rum! You are welcome here and we are open for business.

    Editor’s note: We do not endorse the above reader comment. 🙂

  21. Okay, haven’t said anything about this, to this point. But can’t keep quiet any longer.

    Those of you who are smart enough to see whats going to happen down the road, there is no point trying to convince those that don’t, what is going to happen.

    Common sense is not common.

    And really…who cares. Let what is, happen. You either move, or stay. We all know eventually it will effect everyone. Expat first, then Caymanian next. Not just directly, by taxes. But by lost income in business, rental and housing market and finally if people do move. It means ultimately less taxes for the government to collect because not as many goods are being shipped onto the island, so that means eventually Caymanians will be taxed. It’s just that obvious.

    No sense complaining about it. Let it go, let it be. Let what happens, happens. If it effects you negatively, you will have the last laugh, when what I said above, does and will come true. Sure as the sun rises.

    End of story.

    No sense complaining about it. You can’t vote and change it.

    And no matter what you call this tax. It’s illegal anyways. It’s no different than saying we are going to tax only asians or insert minority or different race or gender here. It’s that illegal. And when that card gets played out in court. You will have even more entertainment to watch.

    You don’t think the British who oversee these territories know this, and already know whats going to happen?! What do you think the British oversear’s will do to the current government that supports this idea. Think about it for a second.

    So, shrug it off. Who cares. And see this for what it is.

  22. @stan et al
    re: low income workers

    People that have a problem with the low income workers living 10 to a room and send their money home continue to ignore the fact that that is their decision. They are paid to perform a service and how they live and what they do with their renumeration is their own damn business. Nobody has the right to tell another person how to live and what to do with their money.

    It’s time to acknowledge that the low income earners in Cayman are entitled to thier own lives, and as long as they’re hard workers, nobody should care about anything else.

  23. I think this tax should only apply to black people or people with birthdays on odd days of the month.

    I think that would make more sense.

  24. In some way you have to laugh at this idiot and his reasons behind it.
    How illegal can this be?

    I propose all ex-pats on the island STRIKE for a week.

  25. I have a black friend, who was born on the 5th – should I warn him?

    How about odd black, even whites – and any other ethnicity we form a committee to pass judgements on, of course whilst keeping the whole process a secret?

    ilovecayman – what exactly is your point? all people, of all generations do/did what it takes at the time. I am sure medieval peasants would have invested in pension plans, if they were gonna plan on living into their 70s. My grandparents took up arms to defend a country against a megalomaniac nutter, funny how history repeats eh (the megalomaniac nutter bit).

    Also, tax patties – but not the beef ones.

  26. How about make gambling legal for ex pats only then. Pay an annual membership fee to the Government and tax on anything you win.

    And to make the locals feel apart of it Mr. Bush can tax the churches on the money from bingo. Simples!!

  27. The expat tax or community enhancement fee (which, for the avoidance of doubt, wouldn’t apply to me) wouldn’t benefit Cayman, or Caymanians. To the contrary it would likely cause irreparable damage to the Cayman economy.

    A business (in this case the Government) that is losing money in a difficult economy has two choices:

    1. Reduce its costs; or

    2. Increase its prices.

    If it reduces its costs by staff cuts some people lose their jobs (but bear in mind that any Caymanian civil servants that find themselves in that position will have priority over persons that require work permits for jobs in the private sector they are qualified for).

    If it seeks to increase its revenue by increasing prices (taxes on expats and/or the financial sector) it will likely have the opposite effect as its customers (in this case both the resident expats and non-resident financial services clients) will likely go elsewhere, the company (Government) will lose even more money, and all employees (or at least more that would have needed to in the first case) will lose their jobs (as will people working in businesses that provided services to the people that have lost their jobs).

    Who wins?

  28. Dear Expats

    If you want to show the true economic value you bring to this country and the local businesses organize a shut down Cayman for a day. In essence it is a pre-planned day where all expats avoid spending any money. Don’t go grocery shopping, don’t fill your car with gas, don’t go to the hardware store, don’t go out to a restaurant or a bar or a movie theater, don’t get a haircut or go to a salon, book your dentist/doctor appointment on a different day, if you have to travel that day try not to use Cayman Airways, anything that you would normally spend money on don’t spend it that day.

    If businesses complained about the economic impact of not being able to sell liquor on referendum day imagine the impact if all expats stop spending money for one day. Any day (except Sunday) would work but if you want to make the biggest impact pick a Saturday. This would surely provide government (and Caymanians) some insight as to what a day in the lifa of Cayman would look like once all the expats have left.

  29. Winston Churchill quotes:
    We contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle

    Interesting eh?

  30. Ok, so call it a fee so it doesnt look like a tax? Anyway, a few comments:
    * people sharing sending to their countries: so these people don’t pay rent, buy food and go to restaurants, and do a good job at their work places? Most of these hardly leave the island and therefore spend more on the daily life here. How many Caymanians do their shopping in Miami or go off island for gambling, spend their vacation elsewhere, etc? Think about it!
    * Encouraging business to hire locals for certain jobs/categories otherwise a fee will be imposed? First of all – the job categories he mentioned – dishwashers, etc – thank you for saying what type of jobs Caymanians should do? Really??? You are down grading your own people! Plus, don’t you think that if those low income positions could be filled by Caymanians the employers volunteer to pay the work permit fee if they could avoid it?
    * countries who already have an income tax also have: unemployment benefits, health insurance with low deductables if any, roads w/out potholes and a lower cost of living, no huge tax on electricity, etc. – so will expats get all these beneifts here now too, but not Caymanians? How is the community being enhanced? Would that not be something McKeeva needs to show also what the will be spent on to ‘enhance’?
    * Employers/Employees no longer having to contribute to the pension payments? So, you think expats come here and work but don’t want to plan for their retirement? How will you sustain pension pay outs for locals if not fed by continuous payments by a large population?
    * I am not sure why Government is still ademant that Casinos should not be introduced to Cayman – those can be taxed, would bring in tourists who currenly avoid Cayman, keep people on island who fly to the Bahamas or Florida for gambling several times a year. Not to forget, those need to be built (work!!!) and staffed (work!!!) providing employment to Caymanians! And if it is for ‘religious reasons’ – people who believe it is against their belief, the bible or otherwise – DON’T GO!!! just like you don’t swear, steal, cheat, be corrupt, lie, waste your employer’s timemoney with personal phone calls, etc.
    Nuff said!

  31. Thanks for the update. The thousands of dollars I planned to spend on a new car in Cayman will now stay in my pocket. Have to save more to pay Cayman taxes in addition to the US taxes we already pay. Or save money to move…..

  32. It’s not an income tax, it’s just a Community Enhancement Fee.
    I’ve informed my employer that I will work for free from now on but will accept a financial gift from them at the end of every month.

  33. You know what – I think McKeeva knew the outrage this proposed fee will bring and will come back with another option – ok, instead of 10% for expats, how about 5% for everyone? Will that work? Now everyone will be happy…

  34. I think the math may be wronhg here…. any expat earning over 20k pays 10% so I assume that there is, effectively, a 20k ‘allowance’ so anything over 20k is taxed at 10%.

    The amoumt fo 7,500 foregone in the example assumes, I think, that if you earn over 20k then all of that income is taxed at 10% which I don’t think is correct otherwise someone earning US20,001 would pay circa. US2,000.10 in tax in exchange for a pay rise of 1 from US20,000 to 20,001 which I am pretty sure the government would not intend to happen.

    I would like to see if this point could be confirmed.

  35. Doesn’t this just prove how backward this Island is? Apalling Human Rights and now segregation between ex pats and caymanians. I worked in the Cayman Islands for two years as a teacher . Yes it was nice but to return to England with it’s diversity, acceptance and fair work and taxes for all was a relief. Cayman, get your independence and get on with your sheltered life. We are squeezed with our own austerity measures. Freeloaders we can’t be bothered with. Ex pats – leave this third world country and prosper in your own

  36. Fascinating to hear the various pips squeaking!!
    Caymanians will have to face reality after all the fat years, like the Pharaoh’s herd.

  37. Awe the moment:

    Turning over last page of 200 years long chapter in Cayman History. McKeeva will earn his place in the history.

    I already can imagine some 2100 year book about Cayman Islands with chapter titled:

    From Ten Sales to McKeeva Bush: Golden age of Finance Industry in Cayman.

  38. @Nicholas Scaife – I assume you are joking. Run from a 10% payroll tax in Cayman to a 14% (down from 16%)payroll tax in Bermuda (not to mention the property taxes and the astronomical costs of rental accommodation)? lol.

    Even in BVI there is payroll tax ranging between 10% and 14%, 8% of which is paid by the employee, and at 10,000 the threshold is even lower.

  39. It is interesting, Old Hand, some of the pips squeaking may be from the same commenter, to dramatize and score political points. Some high ratings here for some mindless comments. The Premier has choosen a tax measure on expats. What you’re not hearing are the other angles to this story.

    That is how I know the partisan politics of this island will be Cayman’s deathblow.

  40. @Winnie – England’s diversity, acceptance and fair work and taxes. Clearly you are not speaking from the perspective of a minority immigrant. Do you want to hear a few stories, or do you prefer to live in ignorant bliss thinking that yours is the most tolerant country?

    And by the way, teacher, that should be its without an apostrophe.

  41. Bodden – A tax measure on expats. Yes, it is just something that will impact expats?!?!?!

    Political point scoring? Whilst the majority posting on here are probably expats, this also means that it is generally those who are not voting.

    Mindless comments? you asked for it, tax beef patties too!

  42. Caymanians will lose. Taxing the expat community or adding a VAT (value added tax)would increase the cost of living to Caymanians and all those who live on these islands. And really, aren’t we taxed enough now (use whatever name you want, it is still taxes). I am a Caymanian Business Owner and either of these taxes will have a hugh impact on whether I can stay in business and continue to employee expats and Caymanians. If the expats are taxed, I will have to pay them more and this cost will be past on to the consumers and if the consumers are not willing to continue to pay the high prices I am forced to charge my business will close. When this happens, more Caymanians and expats are out of work and there is less money for government and the economy gets worse. If the government adds a VAT to sales, then this again increases the cost of living making it hard for Caymanians and expats to live. When times are tough, I cannot look at who likes me, I have to cut costs and do what is necessary to stay open. Why doesn’t government understand that by increasing taxes they are increasing the cost of living, as for every new tax there is a corresponding increase in price for consumer goods. So to those that think only expats are commenting on this think again. And to those that think it will not impact anyone but expats, think again. Caymanians are going to lose a lot and their way of life is going to cost a lot more.

  43. If you are curious as to whether this tax will be good for this island, start your analysis here:

    http://www.forbes.com/sites/walterpavlo/2012/07/26/you-know-its-bad-when-the-cayman-islands-calls-for-income-taxes/

    Forbes online is already using this as a reason to blast the Cayman Islands and the Premier.

    Putting aside that this is bad for expats, it’s bad for business — people aren’t going to want to open a business or launch a fund from here when there is now concern that the government is starting to tax.

    And that’s exactly what it is — just the start. First they tax expats, then they tax businesses, then they tax investment money, and soon there will be nothing to tax but the Caymanians, because everything else will leave. I know some of you would be ok with that — just be careful what you wish for…

  44. Speaker…

    I can vouch for the fair non work practices in Britain …the dole line’s got all races, colours and classes on it right now, home-grown British whites probably being in the majority LOL !

    Seriously though, the austerity measures are hitting everyone hard but no one in Britain is trying to make one set of people pay more to support any others; the tax man here certainly doesn’t discrimminate either, he’s got his grubby, greedy little paws in everyone’s pockets LOL !

    Not only is the very concept probably illegal under any human rights laws that apply to Cayman…

    It is also morally wrong…

    How can McKeeva Bush call himself a Christian and sleep comfortably at night while suggesting laws like this ?!

  45. As a proud Caymanian I have a duty to right this message too all of you and expats who think you are so smart. I am a Caymanian lady with 2 baby’s too support and can get no job even though I apply to all of the individual insurance and accounting places. They all bring in expat so when there are young and smart people from here! Go back too where you from so young Caymanian people have a chance at the jobs.

  46. This is all over the news in the US, they are even taking about Bush being under investigation for Fraud now, they even mentioned the investigation into importing explosives and grouped it all together with the TCI vs Misick Corruption fiasco . I had to laugh at how they likened him to George Bush and poked fun at him for calling it a Community Enhancement Fee when everyone knows in nothing other than income tax.

    I hate to say it, but think Bush just threw himself right under the bus with this last announcement. I am sure the opposition and independent guys are jumping for joy.

  47. seeing as there is no-one to police it anyhow why can’t we just use the tax avoidance methods that have been employed over the years in the UK, umbrella companies, get paid in dividends etc? It will cost the government more to police it then they will receive!!

  48. If its so bad to tax foreignors via payroll, then why is it accepted in other places, and why has it been accepted here indirectly to tax the foreignor’s employer via work permits and immigration fees? You can call them fees, but they are indirect taxes. There are many destinations that has foreignors paying for immigration fees directly.

    Is that racially discriminating against employers or foreignors because they have to pay for immigration fees and the Caymanian does not have to pay??? Of course not!

    If you should ever go to their country and wait in their line, they too will have you paying them fees that they don’t place on their own citizens!

    Just food for thought

  49. @cayman345 – income tax is not the same as payroll tax. In fact some countries like the U.S. have both. Obviously income tax is based on all income (and whether you are employed or not) including but not limited to salary from your employment. Income tax has to be filed on an individual basis after the event whereas payroll tax is withheld by employers on behalf of the government. Payroll tax is a tax paid by the employer based on its payroll. Payroll tax may be partly borne by the employer and partly by the employee.

  50. @ speaker – get a life. When I was there a boat of Cubans were turned away for asking for water. They had no intention of staying and just needed water for themselves (including a pregnant women)in order to carry on to USA. They were chased off by your folk. Later , this happened again but cruise ships of tourist intervened with horror and bought them food and water for their voyage.
    How would you feel if Caymanians came to Great Britian and were told they had to pay income tax but the British didn’t?

  51. Interesting. The richest Caymanian in the history of the Cayman Islands ( Linton Tibbetts ) made his money in the USA under a taxation system that was equally fair to him as it was to all US residents.

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