Many professional organisations including our own have criticized Government for proposing direct taxation. If Government is prepared to back away from that suggestion as potentially devastating to the entire Cayman economy in general, it still somehow has to eliminate the approximately $40M shortfall between revenue and expenses.
The call has gone out to the private sector to make recommendations as to how to do this. That seems to be a sensible approach but there is only one problem with it. Government completely ignored our suggestions last time this happened, and we are sure other organisations have had similar experiences. Political considerations must now take a back seat to economic realities! That is the only way this problem can be solved internally. Further, if cuts in expenses are not made concurrent with revenue enhancements, we will be in the same position again in a few years.
CIREBA, with information provided by Lands and Survey has identified a potential gain from additional revenue measures and some cutbacks of approximately CI$10M/year. We are sure the other local associations can (and already have) identified sensible adjustments on both sides of the ledger in their area of expertise, and we believe the totals could cover the entire shortfall.
Please keep in mind, these will not be short term fixes but rather policy changes which will produce benefits on an annual basis going forward. If we add to that the privatization of some Government owned entities, not only would there be income derived from a sale, but more important in some cases would be the elimination of annual ongoing losses and expenses.
However, all this assumes these private sector recommendations are acted upon. If they are not, we are sure to be faced with the same problems next year and the year after assuming we are still in business. We and other professional groups will be meeting with Government officials to present our specific ideas, but we wanted the public to know what was possible in the interests of transparency.
CIREBA Board of Directors