The 10 per cent tax on work permit holders’ salaries as
proposed by the ruling United Democratic Party government is, for all intents
and purposes, just another work permit fee.
According to details revealed by Premier McKeeva Bush during
a crowded and sometimes rowdy meeting Wednesday night in West Bay, the
Immigration Department will be charged with collecting the tax – called a
community enhancement fee – which will only be applied to work permit holders;
not non-Caymanian permanent residents, not non-Caymanian government workers.
In fairness to the government, there probably is no form of
revenue it could take in that would earn as much money and that could be
collected in such a short period of time without the need to tax Caymanians
nine months before an election.
The reality of democratic politics is that if you want to
govern, you have to win elections.
The Immigration Department now earns somewhere around $70
million a year in revenue for government, mainly due to the collection of work
The addition of this payroll tax, on only work permit
holders, is anticipated to raise another $50 million to $60 million a year,
according to the premier’s budget estimates.
That means the Immigration Department, largely through work
permit fees, could be bringing in $120 million to $130 million each year in
revenues if this payroll tax is implemented.
The figure represents nearly one-quarter of all revenue
government now collects each year.
During Wednesday night’s meeting in West Bay, there was a
group of on-lookers that clearly backed the new payroll tax with some stating
that it should have been more than 10 per cent or that it should have been
implemented 20 years ago.
We wonder if that group would still support this tax knowing
the dependence that it places upon a continued and perhaps even growing stream
of foreign workers coming into the country to fund government’s operations.