Payroll tax plan dead

A brief statement confirming that the payroll tax proposal was now “withdrawn” from consideration was sent out Saturday morning by a group of local business owners.

A group of leading local business owners said late Friday that an agreement had been reached to provide “an alternative solution” to the Cayman Islands government’s proposed ten per cent payroll tax, which would only have been charged to expatriate workers making at least $36,000 per year.

According to the statement issued by Woody Foster, Brigitte Kirkconnell-Shaughness, Roy McTaggart, Dan Scott, A.L. Thompson, Gene Thompson and Wilbur Thompson, Cayman Islands Premier McKeeva Bush “was prepared” to consider alternatives proposed.

Premier Bush later clarified the issue in a statement sent out to members of the local press: “The proposed community enhancement fee will only be withdrawn if alternative revenue measures that do not affect the ordinary Caymanian can be implemented.”

Premier Bush said an announcement regarding that issue would be forthcoming on Monday evening.

The statement issued by the local business owners Friday read as follows: “We, the undersigned, requested a meeting and subsequently met with the Premier to provide an alternative solution for revenue measures to the proposed “Community Enhancement Fee.” We were advised that if we were able to provide sound, viable alternatives, the Premier and the Government would be prepared to consider these alternatives.
 
“We are pleased to say that after many hours of careful review and input from most sectors of the business community, we were able to propose alternatives that are acceptable to the Premier and the Cayman Islands Government in lieu of the “Community Enhancement Fee.” We support the Premier and his efforts to meet the parameters set for the budget.
 
“We recognize that in order to reach this point, it will require all areas of the economy to participate and contribute to the revenue enhancements and they should not be borne by any single sector.
 
“Clearly the proposed Community Enhancement Fee has created polarity and division within our community, and this has caused us great concern.
 
“We are a welcoming diverse society that recognizes the contributions of Caymanians and expatriates alike, and we are confident that the new revenue measures will provide a way to share equitably the responsibility of providing revenue to the Government.
 
“The Premier has committed to making a public statement on Monday night at the Mary Miller Hall agreeing to suggestions – proposed by us and others – and removing the Community Enhancement Fee from further consideration. At this time, he will provide details on the new revenue measures that Government is considering.
 
“Our purpose is making this brief statement at this time is to help relieve the anxiety that presently exists within our community.”

 

1 COMMENT

  1. Obviously the initial reaction from Expats will be happiness, but I’m anxious to hear what these alternative revenue measures are. Even if it’s a tax on the consumption side, it’s better than a payroll tax, but still, my faith in the government to do what’s best for Cayman is very limited at this point.

    Along those lines, you can’t help but wonder if this was all a ploy by the Premier, a scare tactic to make the real goal go down easier with the public. I don’t know if the Permier has that kind of political shrewdness to him, but you have to wonder if some other alternative was the real goal all along. If it was, it’s a shame that so much collateral damage had to come about to make that happen to get to that point.

    In addition to worrying about the budget, I hope the Premier is smart enough to realise that a great deal of damage has been done to the culture of Cayman merely by proposing this Expat tax, and that the government actively tries to heal the very real rift that has now developed on both sides between Caymanians and Expats.

  2. Happy to hear this.

    Sadly the news it is now dead will not be reported around the world with anything like the enthusiasm that its imposition was reported.

    We look forward to hearing the new ideas.

    But I just must wonder why it was proposed in the first place.

  3. We were planning to move over ourselves (my wife and I) at the beginning of next year an become part of the’Expat’community. Everything was arranged and in place but after the news about the expat tax we quickly started looking at our options and decided to go elsewhere.

    Although the tax seems to be withdrawn, I don’t think the Cayman Islands will ever be on our shortlist again! A part from the anymosity shown by local people towards the expats, the fact that the local government blatently and openly discriminates expats is something not to be taken lightly.

    The tax might be gone, but we now all know the countries exact position on expats and the way the plan on treating them.

    Such a lovely place, but with these medievel ways of thinking and treathing people you would be mad wanting to go there.

    The once that do still go, i wish you all the best (I truly mean that and am not trying to be sarcastic).

    In my opinion it’s only a matter of time before this monster is unleashed again. This time I think it just went to far.

  4. That’s quite the impressive list of names. The big guns came out!

    Now I almost feel sorry for our local group of illiterate CAPSLOCK users.

  5. Good for the Business minds of this great little country to stand up for what could of potentially destroyed whatever traction Cayman had to get out of this financial crisis. Hats off to you.
    Good for the Government to have an open ear and the humility to change course when called upon.
    And a huge thanks to those who have now protected us all from Immigration being the Cayman version of the IRS……….
    Democracy is still alive and well in the Cayman Islands.

  6. The damage has been done and the government has been shown up as being totally incompetent. McKeeva needs to go resign Monday morning. Perhaps this local business community can be put in charge. They seem to be the voices of reason.

    If the government can not come up with a budget and has to ask outside forces to do it for them, what does this say for the level of intelligence of these people in charge of Cayman. McKeeva just thought by bringing along his West Bay cronies he could bully his way through this very poor decision.

    People of Cayman rise up and get rid of this man now. For the good of this country.

    And one more thing thank you to the local business people and associations for coming forward to stop this mad man. I am proud of all of you.

  7. Wow! Somehow I find it incredulous that the defacto leader of this great nation could possibly set into motion events that would so polarize an entire country.

    Come-on people we are all in this together and together we can make it work for the benefit of everyone!

  8. There must be consequences sufficient to clearly demonstrate to our community and the international community that this type of poorly considered thing will never happen again. If there are no consequences then confidence and calm will not return.

  9. There were considerable debates during the colonial periods in the United States, and the late 1700’s, the attention of the national government was mainly directed to slavery and the rising numbers of slaves traded and imported into the South.
    The first debate was held in Congress, in 1789, on the question of whether taxes should be paid on imported slaves. During the debate on the slavery duty bill, which was introduced by Mr. Clymer’s committee, Parker of Virginia moved that on May 13, 1789, a tax of ten dollars per capita be laid on slaves imported.

  10. soufendsally wrote :

    McKeeva needs to go resign Monday morning

    Maybe the compass can do a little pre-election poll to see where the people stand on this? Or maybe a little petition on facebook or so 🙂

    I for one would be very qurious about the results.

    Like Jose P said :

    There must be consequences sufficient to clearly demonstrate to our community and the international community that this type of poorly considered thing will never happen again. If there are no consequences then confidence and calm will not return.

    Scrapping the tax now should not be the end of this!

    This one runs deeper !

  11. The tax option may be dead, but the damage is already done by just the talk of it. Now potential investors cannot be sure that once they setup shop that the government won’t raise their costs to pay for their own shortcomings and over spending habits. As for as the divide goes and the animosity shown towards expats and foreigners, that’s been around for a while but this just brought it all to the forefront for all to see. People have really shown they true colors. It will not be forgotten easily and a lot of expat will not be more reluctant to try and become integrated into the community. It’s going to be hard for them to trust those people who smile in their face.

  12. @NJ2Cay – It is so interesting to see you a supporter for McKeeva Bush and against the OMOV, all of a sudden opposing Mac on Opposition side. Who side are you really on? Just what is your stance NJ2Cay???

  13. Finally some common sense. Thank you to these Caymanian leaders and the Asssociations.
    This whole exercise has exposed the Premier and his governement and their lack of knowledge of International business, economics, as well as the simple ability to work together with others to achieve goals. The issues and impact of these actions skipped right over the heads of this group. What truly has been achieved in 3 years other than a blame game and finger pointing?. It is time to rally all people in Cayman and to work the problems together. It is time for radical change, we need to see some of the countries younger and brighter business people step up and change this blame game culture get rid of all this old baggage that is based on ego and personality,dubious business deals that it appears the RCIP are investigating? and bully boy schoolyard politics? and build this fine country back up,involve all, encourage all and then get it done, sure there will be mistakes but that is how we grow. It will not be easy but it is worth the effort. Hope and pray that we will see this change in time for the new elections. There is some good potential within the existing governement, but some of these younger politicians need to stand up and forget just following the party line, what do they really think?, bet they have some good ideas and the passion to get them implemented if only they were given a chance?

  14. I would like to hear from the Premier himself before I beleive any hype…perhaps the Expat Tax will emerge with a new and improved name…yet another agenda to dischipher. My head hurts already.

  15. Surely Mr Bush’s mother and father, as old time Caymanians, would have tried to bring him up in the old virtues of thrift and control of expenditure? When did he jettison this worthy heritage?

  16. To Pebbles and NJ2Cay the hate you speak of was exhibited by expat and Caymanian alike .Too bad you chose to portray it as coming from Caymanians only.

  17. Now what I am suggesting has no basis in any fact so let me make that clear at the onset.
    It occured to me that this whole tax thing was a negoticating ploy by the Premiere with another party. I wondered if it could be Dart but I don’t know. It was so bad an idea that I tried to reason why McKeeva would make such a mistake.

  18. Apprentice, You’re a little confused. I’ve said plenty of times that I am not for or against either party, politicians are politicians. I just voice my opinion which for me is not based on support of a specific party. If Mr. Bush has what I consider to be a good idea I will say that and I would say the same for good ideas from other politicians, On the other hand if they come out with something that is not a good idea I will not say it’s a good or bad idea just because of some kind of loyalty to one party. In this case I felt the idea of direct tax was not in the best interest of Cayman so I spoke my mind, as for the OMOV I didn’t think it was a good idea for one person to have control of a district so I voiced my opinion on that. It has nothing to do with which political party the idea came from. I for one look at each issue and formulate my own opinions based on what I perceive to be facts, something more people should practice. I make up my own mind in lieu of having someone else make it up for me.

    A good example is I think some of the alternatives to this tax mentioned by Ezzard Miller were great ideas. This is someone I am not used to hearing offering good ideas and well thought out options, but in this case I did and I have no issue with giving credit where credit is due. I was really impressed by the fact that he seemed to be in support of the least popular side of this debate which may have lost him some political support of the voting populous.

  19. Apprentice, I am actually not Caymanian however contrary to what a lot of folks may think of those born on foreign soil I do hold Cayman very dear and close to my heart and it’s really important to me that Cayman and it’s people have a bright and prosperous future.

    You may also find it interesting that I am not an Expat worker.

    I get a lot of comments that I cannot possibly understand the hardships a lot of Caymanians have to deal with, which may be true for the most part but growing up as an African American I to have had to deal with my own share of struggles and discrimination. So weather people believe it or not I can relate to a lot of issues Caymanians deal with.

  20. Fuzzy,

    I don’t fully agree with you but I will not deny that there were some comments from expats that could be reconsidered. I for one have sure shown my dose of sarcasm 🙂 However in this sort of conflict it is absolutely normal for discussions to get slightly heated.

    The problem is not so much the people themselves though, and I still think caymanians are great people.
    The big problem is the position of the government. Unlike the general public and average Joe on the street, the government has an obligation to first an foremost be fair and treat all people that live and work on the island on an equal basis! Caymanian and expat alike !

    We can argue this untill we are all blue in the face, but I still think that the way the cayman islands are set up and have been operating for years, Expats need Caymanians and Caymanians need Expats, plain and simple!

    The current government and McMenace in the first place have shown that they don’t understand this basic fact, they manifested a serious level of incompetance and have openly shown that they don’t realy care ( also towards caymanians !).
    Clearly not the kind of people that anyone would like to run a country!

  21. Okay, so we have had an extra day to cool down the rhetoric and really start to think about this.

    Most importantly we need a cohesive approach to damage control, it’s not enough to just say this was a bad idea and move on.

    Government needs a plan to remove the uncertainty, otherwise there will be no chance to return to prosperity and new investment.

    Every real estate owner on the island knows the value of his or her assets are completly dependant upon the attitude or investment sentiment of new buyers.

    Should potential buyers or investors become disillusioned with island politics then the net result will be fewer sales, less investment, less construction and the ripple effect will be felt everywhere in the economy.

    Goverment revenues will erode and social costs will increase. All asset classes will be under utilized, revenues diminish and demand for employment curtailed.

    Unless of course the island can sustain itself on tourism and naturalized economic revenues which are hardly enough and probably diminishing.

    More than ever before in the past the message should be Cayman is a stable and safe investment territory with advantages to investors.

    All stakeholders in Cayman will benefit from a cohesive political new investment strategy, one that encourages pluralism and avoids dualiism.

    So many great things have been achieved on this island over the last 5 decades especially when compared to social economics of the Carribean in general.

    High time to re-invest in those founding ideologies and strategies that created this fabulous nation.

  22. The Cayman Islands are one of the world’s richest jurisdictions (more prosperous than the United States according to the latest World Bank data), in part because there are no tax penalties on income and production.

    So why are the local politicians considering a plan to kill the goose that lays the golden eggs? For the simple reason that they have been promiscuous in spending other people’s money. This chart shows that the burden of government spending in the Cayman Islands has climbed twice as fast as economic output since 2000

    A quote for Forbes magazine..

    Food for thought..

    Read the whole article here..

    http://www.forbes.com/sites/danielmitchell/2012/07/31/heres-why-the-cayman-islands-is-considering-fiscal-suicide/

  23. N2CAY,

    Directing people to the forbes Website is only the beginning.

    They need to read the comments.Read the last comment to see who Mr. Mitchell truly is and who he represents?

    Big Business, Cayman as a world competitor, and the continuance of our pension funds and trillions of our dollars passing through the Cayman Islands so the US
    can give it away to the Wallstreet thieves.
    He’s simply a watchdog watching our food!

  24. LiverPool, Please correct m if I’m wrong I get the impression that you feel Taxing would be better than potential alternatives offered by these folks. Am I wrong in thinking that Cayman being a world competitor in Big Business and all those trillions of dollar passing through Cayman has been a big part of what’s been keeping it going all these years. Would not the loss of these type of things be rather detrimental to the economy. I don’t know the man personally but I wouldn’t find it hard to believe that as you say he’s a watchdog, and yep there are plenty of thieves on WallStreet. But I do have to ask if Cayman would really be better off without this type of Business.

  25. @NJ2Cay

    Unfortunately, no. We can’t all just get along and it’s a lot to do with Cayman society to begin with. It’s a stratified society much like Britain, and maybe you haven’t experienced that? I have and I really don’t like it.

    It is possible on Cayman to work hard, gain an education and a good job, and move to a better address too, but moving out of your social group to a different level is pretty much impossible.

    Some people are resentful of that, and many of them see Expats moving in and being accepted in social circles where they themselves are not accepted. Some of them have a pretty big chip on their shoulder about it too.

    I should say again for the record, I was a divemaster when I lived in the Cayman Islands. A divemasters rung on the social ladder is actually deep underwater but I knew that from the start.

    What’s different today is that people like me can speak in a relatively anonymous manner, and I try to be polite about it. At the same time though, those people with that chip on their shoulder can do the same thing and they might not be so polite.

    I can respect their position because I can see where they’ve been coming from. I just wish they would understand how obnoxious that CAPSLOCK key really is, and how it really isn’t helping them to present their argument.

  26. My concern is with the mentality Cayman politicians seem to have toward excessive spending. This comment is directed toward all politicians past and present that want to build monuments to their greatness.
    There is absolutely no evidence to indicate that any politician has understood the need to cut governmental expenses and excessive gold plated capital projects.
    Even if this tax measure went throught and could be collected, a big if, I don’t believe that would satisfy the spending requirements of government.

  27. The need now is for a broader base for the Islands democracy. There are generally considered to be over 50,000 Caymanians yet there are less than a third of that number when it comes to registered voters. Sounds like a political Cartel ?

    The more voters there are the less likely politicians are to try and ride rough shod over the rights of any section of the community.

    Make the political base broad enough to include expats, (There was talk of 17 constituencies – adding 5 or 6 Expat constituencies would allow a voice and a pathway to express valid points of view, not to mention reign in lunatic policies) a moderating voice so to speak.

    There is a vast wealth of experience within the expat community and some of the things we feel strongly about are issues as valid for Caymanians as for Expats. The difference is we may have seen solutions! I come from a town with easily twice the (peak) population of Cayman which has been ZERO LANDFILL for a QUARTER CENTURY.

    Despite what Mr Bush said last week, there are artificial barriers which exist both overtly and covertly prevent Ex-pats accessing the same rights and services available to Caymanians. Sure you can own property but you will be rolled over after 7 years, and pay a different Stamp Duty.

    I lost a colleague who will be hard to replace (key employee was being talked about) because he could not get permission to educate his son here – not saying it might not have happened eventually but he needed his son settled before the new school year and the Civil Service just dragged it feet so long, after several months, he figured it was easier to get another job than get a schoolplace here – the policy may have ultimately allowed it but the inefficiency became the barrier.

    BTW I am below the 36000 that was being talked about but I still vehemently opposed the tax even though it would not cost me directly. It was Wrong morally, ethically and economically and would have had an unforseen adverse effect on Cayman.

  28. Sonic, the 50,000 Caymanians include children and the infirm, so less than a third of that number being registered voters is a sensible figure.

    Every country provides benefits for citizens that temporary workers who are guests in that community do not enjoy. So, please consider that before suggesting that Expat constituencies are practical when in fact they would be extraordinarily unconventional.

    I’m an ex-pat and a property owner and madly in love with this country. But I do recognize that I’m a guest here and not a citizen. If you want the rights of citizens, begin the process. If you don’t plan to remain here for the rest of your life, perhaps you’ll be happier if you begin acting as though you are a guest and not a fixture.

    Regardless, I gratefully salute Woody Foster and the other local business people who worked within the system to calm the tidal wave of unrest created by the Premier’s ill-conceived Community Enhancement Fee. Such business leaders provide the ballast to keep the Good Ship Cayman upright during the current economic storm. Well done!

  29. @Sonic – The population is about 52,000. Only about 30,000 of that number are Caymanian which includes children. With the new eligibility requirement in the constitution the number of voters is likely to rise to 17,000 for the next general election. That is quite a reasonable proportion of the total population given its make up.

    5 or 6 expat constituencies? You had better quit whatever you are smoking. Obviously that would be completely unacceptable here or in any other country. We want no part of any such apartheid.

    @ OldDiver – Cayman stratified society like Britain? If what you mean is that certain groups of expats try to exclude Caymanians regardless of social standing or wealth from their neighbourhoods and social gatherings then I agree. Otherwise that is pure poppycock. The old merchant class in Cayman no longer holds the allure or sway that it once had. Young upwardly mobile professionals don’t care about them anyway.

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