Passenger, accommodation fee hikes proposed
Separate bills that would raise the tourism accommodation tax and the departure tax for visitors to the Cayman Islands are set to come before the Legislative Assembly.
Cayman Islands Premier McKeeva Bush made reference to increasing the levies on tourists during public meetings on the government’s 2012/13 budget. The fee increases were part of a raft of revenue measures implemented in the current budget to make sure public sector ends meet. The last time either fee was amended was in 2003, according to government records.
The proposed amendment to the Tourist Accommodation [Taxation] Law (2003 Revision) is a straightforward increase on the tax from 10 per cent to 13 per cent.
The tax is paid by any proprietor of a tourist accommodation. The tax is now equal to 10 per cent of the amount of the charges made for the accommodation.
The departure tax is a bit more complex. According to the bill, outbound vessels – excluding cruise ships – will pay an increased levy. The tax charged to cruise ship departures will stay the same as under the old law.
Departure fees for aircraft or any sea vessel, other than a cruise ship, that carry visitors will pay a fee of $26 per traveller; the old fee was $16.
If the “vessel” described is an aircraft, $10 of the fee will go to the collector of customs and $16 will be paid to the Cayman Islands Airports Authority. If the “vessel” is “neither an aircraft nor a cruise ship” a sum of $26 will be paid to the collector of customs.
The departure tax for cruise ship tourists will remain at $6, according to the bill.
According to government budget figures, the combined increase in the tourism taxes are expected to generate $3.125 million in the current budget year. Many of Cayman’s tourists come to the Islands between January and April and it is anticipated the new fees will affect the upcoming high season.
Increases in tourism-related fees are a relatively small percentage of the $90 million the Cayman Islands government seeks to realise in coercive revenues within the 2012/13 budget. The fee increases largely involve more charges on the local financial services industry, increases to work permit fees for businesses that employ non-Caymanian workers, motor vehicle fees and increases on duty for cigarettes and alcohol products.
Cayman expected to receive nearly $591 million in coercive revenues for the current 2012/13 budget plan, compared to about $484 million collected, according to unaudited actual figures, in the 2011/12 budget.
Coercive revenues do not encompass all revenues government collects, but they do represent the vast majority of the funds central government spends each year.
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Oh sure, make the place even more expensive.
We’re in Europe. My wife and I just booked 10 nights in the Canary Islands for our winter warm-up get away and the total for flights, hotel, and transfers is less than the cost of the flight for just one of us to fly the Cayman (and let’s just never mind the cost of everything else in Cayman).
The CI Government just doesn’t get it.
OldDiver is correct…The Cayman’s are pricing themselves out of business…I have stayed at other Caribbean spots for what it cost just to fly to Grand Cayman…Probably to late…Government needs lots of money to stay afloat…
I have friends who are Civil Service workers here on Cayman Brac; their paycheques have taken a 3.2% cut in wages due to CI Government cost-cutting measures. Where and when does this cheese-paring by Gov’t stop? Couldn’t this government look into compacting the metal trash of mini Mt. Trashmore on our South Side and selling it off to other countries? Thereby ridding this island of the terrible Dump Scourge
(which has existed now for 20 years on private property) and enhance the value of expensive south side houses? The prices of all consumer goods,
of everything,from gas to food are skyrocketing here. We don’t question paying twice what folks complain about paying in US for gas or a piece of meat. Belt-tightening is tough. Despite rise in prices I am in awe and admiration of grocery and market owners who struggle to import all we need to live on here on this tiny island. My gratitude knows no bounds! When will our Government realize that they are strangling the goose that’s laying the golden tourist eggs?
When will our so called Leader stop and think that with how things are going with Prices of everything increasing or should I say SKYROCKTING people will just start to leave and go else where! Oh thats beacuse he said it on CITN We dont want any sandwhich eating tourist here I am so sick of him with his idea’s of strangling every dime from people and not caring about anyone unless they are a Millionaire cause he does not care about his Caymanian people or this Island at ALL!
When they put idea of Payroll tax of the table, I said that it is good – good only because they kept Cayman Islands income tax free and because they dropped idea of targeting pretty small group of people and making this small group of people to pay for their mistakes. And also I said that it is bad – because impact on the Cayman Islands economy is still the same – it is just distributed differently. Instead of one big hit at expats (which would mean decrease permit fees some finance business moving out) they changed to a number of small hits here and there – tourists, boat owners, drivers.
But the overall effect will be the same – overall decline or reduced growth of GDP and more budget problems next year. Any reasonable solution still comes back to government expenses reduction.
I am wondering – if public services are bloated, and at the same time government can’t reduce people numbers because:
– 900 work permit holders in public services are doing to important job to be fired,
– firing Caymanians will increase tension.
Instead they do so called across the board reduction of 3.2%, which kills motivation in those public workers who were hard working and effective.
This is a debatable question, don’t throw stones at me,
but is it possible to restructure public services by reducing staff numbers, but instead of just firing people to put them on long-term unemployment benefits? Say 80% of salary? While keeping best people employed without any reductions or even with salary increase? From the budget perspective it will be the same.
Idea here is that paying salary to people whose work is not needed sends wrong message. It seems that for some people in public sector salary they get is already a quasi-unemployment benefit, it’s just called salary. If you start calling it unemployment benefit that would send message that person should improve, get new skills to get competitive in jobs market. And earn his/her place back or kick-some-expat-out in private sector. If you continue calling it salary – then nothing changes.
Or maybe it’s completely wrong and every single person in public services is overloaded with work and extremely effective? I don’t know, so I didn’t want to insult anybody here.
By the way – equal across the board reduction of salaries reminds me about communism. Just a thought.
If you keep raising tourism taxes you will
lose many tourist. We have been visiting Cayman for a
while and every year we notice prices go higher and
higher. Many visitiors will be going to Aruba, The Virgin Islans, Antigua, St. Martin,Barbados etc.
Think long about raising taxes.
The government is on a fast track to drive away tourism here and I am quite sure there are multiple outside influences, i.e. other islands, that financially support these tourism reduction actions. Just follow the money of those cashing in on CI’s downward spiral.
Bad idea, brilliant execution.
I don’t think any of these measures will affect the imminent high season as badly as the 2013/14 one.
Most Tourists have already booked but once they get home the damage will start growing and spreading like a cancer.
Bush is always critisising blogs like this one but is clearly ignorant of the power of the social network, A tourist can have told friends, colleagues and relatives accross the world in minutes of arriving home or indeed while on holiday – these are comments from someone you know with no axe to grind and folks trust that more than a million glossy posters and magazine adverts from Caymans Minister for Tourism
Facebook status – back from cayman but my wallet is in intensive care!
Honestly, Cayman needs to assess what facilities it has to offer tourists and plough back a significant proportion of the revenue generated into improving infrastructure.
Are we a family destination, not really families are usually on a tight budget and can go to florida with Seaworld and Disney and make their dollar go much further.
Or a Cruise destination? clearly not given the facilities.
Voluntary measures like scratch cards generate huge income everywhere else in the world and the National Lottery in england gives millions to charity every week.
Trouble with taxes (by any name) is people always ask;-
OK, But what am I getting out of this tax?
Financing an overly bloated and inefficient government is not the answer they want to hear.