Tax threat damage may already be done

Many programmes, activities and businesses said they’ve lost money since Premier McKeeva Bush announced a 10 per cent tax on the income of work permit holders making $36,000 or more in the Cayman Islands.

The tax, called a ‘Community Enhancement Fee,’ was initially going to be paid by those who made $20,000 a year or more. However, last week, Mr. Bush upped the threshold. He has since killed off the idea.

One company, which assists several charities in the Cayman Islands was hit hard, and Davenport Construction officials state it may be difficult to recover.

“We have lost three sales, which we had deposits for since the announcement of a payroll tax on expats last week. The combined amount for those sales was $1.3 million. One was a home worth $345,000 and two others worth $485,000,” said Davenport Construction owner Paul Pearson.

He said the potential home buyers backed out because of the proposed tax.

“One man is losing his deposit, as he made changes to the home he was going to buy. A deposit is nonrefundable if changes are made. However, this individual did not mind,” explained Mr. Pearson.

He said the customer told him, “Unfortunately, whether a fee or a tax is imposed or not, the haste with which decisions are made and the impact this can have on the economy means that we would not consider buying, as it is all too uncertain.”

Davenport Construction spent $120,000 in the community last year, according to Mr. Pearson. This year, the company had a target of more than $200,000 for community projects, which included assistance to the Humane Society, Red Cross, Meals on Wheels, the Cayman Islands Youth Development Committee and the Positive Intervention Now programme, which is an after school intervention programme for adolescents in central George Town. A centre for performing arts at the George Town Primary, which was on Davenport’s agenda for this year, has now been suspended until further notice. The project was worth about $300,000.

A statement from the George Town Parent and Teacher’s Association regarding this development read, “We are saddened that the Centre for Performing Arts project has been put on hold but we understand the gravity of the situation. We hope that the circumstances surrounding the postponement can be rectified in order to bring this amazing project to fruition. The PTA will continue to raise funds for the music and performing arts programmes, which are a very important part of the development of our children.”

Davenport will still donate labour and materials to install playground equipment, which the PTA secured through fundraising.

“We thank them from the bottom of our hearts for their generosity,” read the statement.

1 COMMENT

  1. Unless the security in investment is fully restored by an act of non-recourse there will never be faith in this sanctity again.

    As for real estate investment the damage is already done and owners will have to look very far down the road to recuperate.

  2. now would be a great time for a string of angry emails from Caymanians telling the expats to not let the door hit them in the ass on the way out…

  3. I can certainly atest to the fact that the dream is over in Cayman for myself and family. The mere announcement caused financial ruin for us. So back home we go, I guess. To start all over again. That’s the price you pay for dreaming of a better life I suppose. Thank you Mr. Bush. Thank you.

    Sincerely,
    Joe Q. Expat
    (p.s. Thank you for causing such a divide amongs everyone too. That was an extra, special treat.)

  4. It sounds more as if the company is using this tax proposal as a convenient excuse not to donate money to the community and as a political weapon to take to the government’s proposal with. And the media appears all to willing to accept this company’s narrative without any proper scrutiny. For instance, how much exactly was this company going to donate to the GT Primary project? It was a 300,000 project, but how much was Davenport going to commit, if any, when they said the project was ‘on their agenda’ this year? Have other donors withdrawn from the project. If so, why? How much loss specifically has the company lost from the Government’s proposal? Has their position changed now the tax is officially dead?

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