Open letter to the Premier from protest group

August
06, 2012

Mr. Premier,

Please find enclosed a list of proposals
which we feel are reasonable, viable alternatives to the payroll tax which you
have proposed. 

We are well aware of your position that any
alternative measures affecting “Ordinary Caymanians” are unacceptable.  We are however slightly confused as this
statement contradicts your proposals to reduce costs by implementing
legislation which requires civil servants to contribute towards their
healthcare coverage.  Are Caymanian civil
servants not ordinary Caymanians? 

The revenue measures which we have proposed
will in most cases increase the amount of money which Government collects from
the residents of Cayman, both Caymanian and Expat alike, however this is
necessary and unavoidable given the budget framework dictated by the Foreign
& Commonwealth Office (FCO).  Our
group has aimed to reduce the additional burden borne by those of us which are
less fortunate by seeking proposals that target luxury items and items which
can be classified as vices.

The measures which we present to you
provide alternatives which, as they are proposed, will produce as much as $83
million dollars in additional revenue, or perhaps even more, over the coming
year.  However, and much more
importantly, we have proposed a wealth of ideas as to how Government may reduce
their costs.  Unfortunately, due to the
fact that audited records of Government accounts simply do not exist we are
unable to place a quantitative value on these proposals.

We ask that your administration consider
these proposals and determine which may be used to bring our budget into
compliance with the FCO requirements so as to ensure the proposed payroll tax
does not come into fruition.

Best regards,

Casey Goff, Chaz Hill and Eden Hurlston

Members of “Caymanians & Expats United
Against Taxation”

 


  

Potential Measures For Increases In Government
Revenue, Their Impact And Notable Comments
 

Implementation
of a community enhancement fee
 

Potential
Impact: $18 million

As Government is
looking to enact a community enhancement fee our group feels it necessary to
suggest one of our own.

We feel
Government should enact a policy which requires every member of the labour
force to contribute either $500 or forty eight hours of community service per
year, or an equitable combination thereof, on an annual basis.  According to information found within the
2010 statistical compendium, compiled by the Economics and Statistics Office, the
labour force includes roughly 36,100 people. 
Therefore, through this policy and on an annual basis, Government would
gain roughly $18 million in revenue, donations of more than 1.7 million man
hours to charitable organisations, or an equitable combination thereof.

Implementation
of a 0.0003% monthly fee charged on all deposits held within the Cayman Islands
 

Potential
Impact: $54 Million

According to information
found on www.wikipedia.org there is
approximately $1.5 trillion held on deposit by the various financial
institutions of Cayman.  Applying a
monthly fee of 3/10,000ths of a percent to these deposits will
result in estimated monthly revenues of roughly $4.5 million.

Notable Comments:

The fee
percentage we have proposed, which equates to less than 0.004% per year, is
miniscule.  Despite this, our group
remains mindful of the fact that the financial services industry is a pillar of
our economy, and we must therefore be forethoughtful when discussing the possibility
of applying additional fees to this industry.

We believe this
measure will be agreeable to those who hold deposits within our shores as it
will in most cases be outweighed by the interest which is earned on their
deposits.  To quantify this measure, a
person who maintains an average balance of $2,500 will be required to pay 9¢
per annum.

Our group is
extremely hesitant when proposing this measure. 
Our leadership has consistently proven incapable of providing audited
accounts, and we therefore fear this potentially limitless revenue measure may
be abused.  To ensure this measure is
used responsibly we suggest, that should this proposal be adopted by
government, it is enacted along with legislation which stipulates the fee
levied on deposits may only be adjusted during the financial year immediately
prior to a general election.

  

  

  

Increase in
exit fees
 

Potential
Impact: $3 million

According to
information found within the 2010 statistical compendium, compiled by the
Economics and Statistics Office, there are approximately 300,000 visitor air
arrivals per year.  An increase to the
fees payable upon exiting the country of only $10 therefore results in a
significant increase to Government revenues.

Notable
Comments:

The statistics
that we have been able to locate only indicate visitor arrivals, and take no
consideration for Caymanians and Residents returning from abroad.  Our estimate for an increase of revenues to
the amount of $3 million is likely conservative due to this reason.

We are again
hesitant to levy additional fees on a pillar of our economy, tourism in this
case.  You will note, that due to this
hesitancy, we have chosen not to suggest a similar increase to the fees payable
by our guests arriving by cruise vessel.

We note that
cruise arrivals have declined significantly since 2006, whilst air arrivals
have remained more or less constant. 
Given that our allure as a cruise destination is also diminished due to
the need for tendering of passengers we do not feel it appropriate to apply
further fees to this industry.

School
enrolment fees
 

Potential
Impact: $2 million

According to
information found within the 2010 statistical compendium, compiled by the
Economics and Statistics Office, there are approximately 4,900 children
enrolled in public school.  Approximately
700 of these children qualify for free lunches due to financial need; we have
therefore assumed the families of the remaining 4,200 children are able to
afford an enrolment fee of $480 per year for each of their children.  This amount equates to $40 per month, and is
far less than tuition fees at the various private schools of Cayman.

Notable
Comments:

Our group
understands that education is one of the most important elements of a modern
society.  We believe that all Caymanian’s
should have free access to these services, which must also provide an education
which is of an extremely elevated level. 
We therefore hesitantly put forth this proposal; however feel that it
will be less damaging to the future of Cayman than the proposed payroll tax.


  

Reinstatement
of garbage collection fees
 

Potential
Impact: $2.7 million

Through our
research we have discovered a report on the Cayman Islands Government website
related to garbage collection fees. This report has shown that our Government recently
ceased collecting fees for garbage collection services. At the time these fees
were discontinued they were $100 per residence, an amount which had been
unchanged since the 1990’s.  We therefore
propose that our Government reinstate this fee for garbage collection services
at the increased amount of $120 per household.

According to data
presented in our most recent census reports there are 22,760 households within
our borders, which contain 55,456 residents. 
It is therefore safe to assume that in most instances the fee proposed
will be a shared expense which minimises its impact on the residents of Cayman.

Notable
Comments:

Our Government has proven unable to collect these fees in the past and
we would suggest that a partnership be initiated with the Caribbean Utilities
Company (CUC), as the overwhelming majority of households in Cayman will
already be making a monthly payment to CUC which has a proven record of
collecting their receivables.  This fee
would therefore be collected monthly, as a $12 additional charge on CUC
accounts billed to residences.

Implementation
of a telecommunications fee
 

Potential
Impact: $1.6 million

According to
information found within the 2010 statistical compendium, compiled by the
Economics and Statistics Office, there are approximately 137,000 fixed and
mobile telephones in Cayman.  We propose
Government apply a telecommunications fee of $1 per month to each of these
lines.  $1 per month is a trivial amount;
however this measure results in a significant increase to the annual revenues
of Government.

Notable
comments:

We again suggest
that this fee would be collected by the various telecommunications in Cayman as
they each have a proven ability to collect receivables.

Increases in
vehicle registration fees
 

Potential
Impact: $638,000                

According to
information found within the 2010 statistical compendium, compiled by the
Economics and Statistics Office, there are approximately 34,500 registered road
vehicles in Cayman.  We propose
Government apply an increase of 10% to all registration fees, as we are unable
to determine when they were last adjusted.

Assuming an
average registration fee of $185 per year, which is likely a conservative
estimate; this measure would generate approximately $638,000 of additional
revenues each year.

Increases in stamp
duty on insurance policies
 

Potential
Impact: $744,000                

Given that it is
required a vehicle is insured for licensing we know that there are at least
34,500 insurance policies written per year. 
We have also shown that there are more than 22,700 households in Cayman.  Assuming half of these households carry
building and content insurance we can account for a total of 57,200 insurance
policies are written each year, and this is likely a conservative estimate.

Under these
assumptions increasing the stamp duty from $12 to $25 could produce $744,000 of
additional revenue for Government each year.

Increase in
postage fees
 

Potential
impact: $750,000

According to
information found within the 2010 statistical compendium, compiled by the
Economics and Statistics Office, there are approximately 7.5 million pieces of
mail sent each year.  By increasing
postage fees by 10¢ per piece of mail Government can increase their annual
revenues by $750,000.

It is worth
noting that individual pieces of mail often incur charges which are greater
than the minimum rate for a standard letter due to size, weight or
destination.  Our assumption assumes each
of the 7.5 million pieces of mail sent each year is an ordinary letter.  The projected revenue which could be produced
from this source is therefore vastly deflated.

Notable
Comments:

Should Government
choose to implement this proposal the public will likely react by adopting
alternative methods of delivering mail items, such as e-mail.  A proposal of this nature will therefore
benefit Cayman regardless of its impact on Government revenues as we will see a
reduction in the amount of paper waste arriving at the landfill.

Increases in company registration fees 

Potential
Impact: Unknown

Our research has
suggested the annual registration fees payable by a company are dictated by
type of business rather than the size of the business.  We have discovered some instances whereby the
fees payable by a small business, with only a few employees, is the same as
that paid by organisations which produce tens of millions in revenue each year.

We feel this
system of fees should be reevaluated, as there may be potential to produce at
least one million dollars in additional Government revenues on an annual basis.

Duty increase
on tobacco products
 

Potential
Impact: Unknown

Unfortunately,
we have been unable to locate statistics related to the quantity of tobacco
products which are sold in the Cayman Islands and are therefore unable to
identify the value of this proposal.

The benefits of
this proposal are two fold however.  We
would suggest that additional duties be levied on tobacco products which cause
the cost of common cigarettes to increase to $10 per pack, or perhaps
more.  This increase will obviously
result in additional revenues to Government for every product imported; however
it will also lessen the long term strain on our health care commitments by
discouraging the use of these harmful products.

Notable Comments:                                                              

Although our
group has suggested applying similar measures on other vices, such as alcohol,
we have refrained from doing so at this time as we recognize there would be a
negative effect on our economy as bars and restaurants would likely pass the
additional cost on to their customers.

 

1 COMMENT

  1. All good points and well made.

    However, the fundamental problem with CI public finances is not a lack of revenue, it is uncontrolled and inefficient spending.

    Any immediate increase in revenue will be lost in the mix if it remains business as usual. McKeeva (or whoever takes over when he is finally forced to resign) needs urgently to address the rampant waste and profligacy of Government.

  2. Like JTB said, the government needs to control its expenditure. These revenue sources are great ideas and in my opinion, many of them should should have been put in place long ago but we need to remember that the economy is subject to inflation with all of these extra ‘fees.’ Adding too many fees could have a negative effect in our society. Government needs to control expenditure.

    Another person commented on another article saying that sometimes less is more which I agree. Reducing fees and creating a free economy could actually promote business within our islands which means more revenue for the government.

  3. The government needs to start implementing renewable monies as projects.

    Ie. parking meters
    Which then would pay way for big city type buses for transportation.

    Both these projects would then pay for parkades. (build parking lots on government land, and have it pay for parking)

    start fining people for illegal parking.

    All these are the building blocks for a modern society.

    Just these initiatives alone will pay for themselves in 5 to 7 years. And after that. It’s 85% pure profit for the government. 15% goes to maintaining the info structures mechanically. The 85% would go to government coffers and creating jobs for Caymanians that would keep these money making building blocks running.

    Now that we have that building block done.

    Lets look at other such projects.

    Casino’s. Attracts tourists, creates jobs, and creates revenue for the government.

    Now bush has at least 10 million a year, renewable; with just these simple ideas. And this will be money coming into the government forever. As long as there are people, and cars.

    Lets hear more…….

    Lets throw our ideas out there. Maybe someone that can get these ideas rolling, is reading these comments.

Comments are closed.