Expat tax debate divisive

I write this letter as a Caymanian, living in this country almost all of my life. These days I find myself falling asleep worrying about the image being painted about living and working in the Cayman Islands. I have never witnessed such a separation between expatriates and Caymanians, with the Community Enhancement Fee proposed by the current government drawing a more distinct line between the two.

I must say that, as a Caymanian, I was not in agreement with the current government’s ideas for raising revenues, especially the Community Enhancement Fee proposing that tax should be deducted from salaries of non-Caymanians working in the Cayman Islands.

If introducing a national tax based on remuneration had become Cayman’s only option, I could not see how this could be limited only to non-Caymanian residents’ salaries. How could taxing a population that you are constantly trying to reduce be seen as sustainable? Especially when government is telling us that the taxes collected from work permit holders’ incomes are vital to the country’s budget.

Tricky position

Introducing an income tax solely on expats puts government in a tricky position once it includes the revenue from those peoples’ income tax as part of the Government’s general revenue stream. That effectively makes an expat more valuable than a Caymanian. Ask yourself, how can the government really focus on ensuring that Caymanians have preference over an expat for a job when the revenue from that expat paying income tax is so valuable to the budget?

I was misquoted when people said I was in support of taxing everyone; just did not understand how we could only tax expats. After reading what’s above you may now understand why.

The fact remains that the general feeling is that one of the main problems with Cayman’s budget is spending. Since governments have been ignoring this for the past three election terms, this country has found itself in a position where we know we want to cut spending, but do not know where to start.

The truth is that Caymanians need to sit down and think about how involved and big they want Government to be. In the past Government’s position was to put more responsibility on the individual rather than on Government.

Evaluate funding

Introducing government programmes like mortgage assistance, low income housing programmes, government subsidized medical insurance and extreme spending on public facilities come at a cost and are afforded by nations that tax their residences using a number of methods – income tax being only one of them. This may be a good time to evaluate whether some of these should be Government funded programs, or charities.

As charities, these programmes would be open to funding from the private sector. Government might find that the public would be less critical of these programmes once the possibility of political gain has been removed. Furthermore, having controls in place that limit government’s donations to charities on an annual basis, and limiting the amount any one organisation can donate to any one charity each year would help control something that could otherwise be used as political PR avenues.

This along with these charities competing for funding with the others out there would encourage better governing of funds; avoiding some of the abuse we’ve witnessed earlier this year with the National Building Fund.

Citizens of this country have been pleading to government for years about circumstances where they’ve felt that work permits have been taken out for positions they’ve applied for and are qualified for. Could this not been seen as an opportunity for an additional revenue stream for Government?

Government should develop a website requiring all vacancies be advertised on there in addition to the local newspapers. Government would charge a small fee of CI$50 per job posting and require that applicants requiring work permits respond for these positions online while encouraging Caymanians to do the same. Advertising nineteen thousand work permits through this website would generate additional revenue of $1 million per annum.

Surely the same resources that were going to be used to modify the Immigration system to allow for income tax to be collected could be used to develop this website. Additionally, the income from the first year could be used to further develop this to help Immigration identify positions where qualified Caymanians have applied and identify areas of abuse.

Considering this is my background, I am certainly in a position to say that a project like this, if not abused, should not represent a significant investment on behalf of the government. Also plans can always be made to revisit one year later, this time with a budget made up from the previous year’s revenue.

Initial stages

Knowing that government is involved in the initial stages of the recruitment process, rather than after what each company individually determines was a valid attempt at offering a vacancy to the local labour force may help lower some of the tensions between Caymanians and expats.

In summary we need to understand as a nation that if we were to introduce what was proposed by government, we would not have been dealing with the chance of an income tax that could be introduced to all residents, we would have been dealing with certainties. If the number of work permit holders declined, and government relied on the revenue from income tax that would have been collected from those individual’s salaries, then it would be forced to collect it from its citizens.

I know personally that isn’t the only motivation for my opposition to what was proposed by the current government, and I would hope that other Caymanians would say the same. The tax proposal did not represent the wider public’s view of expats and the traditional Caymanian history of being open to outsiders.

I was born here and grew up never noticing a difference between Caymanians and expats. I want the same for my children.

Timothy Dilbert

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