The countdown is now on at the Cayman Islands Chamber of Commerce, as we gear up for our brand new CayShop Business Expo, set to take place at The Arc at Camana Bay from 25-27 October.
This important showcase will bring together businesses from across the Cayman Islands in a bid to house under one roof the best that Cayman has to offer when it comes to shopping locally – from business technology providers all the way to locally-made goods by small cottage industries. At the same time we are excited to be launching the CayShop buy local campaign, and we encourage everyone to think local first before heading overseas to make their purchases.
Fees and duties equal higher prices
While not always the case, prices for retail goods in Cayman generally are higher than that of competitors overseas – especially when purchased in the United States. Government duties and fees and limited sales volumes for some retail items are part of the many factors at play here that pressure business owners to increase prices, yet business owners say it is important to look at the big picture and understand that buying locally has an important impact on the economic health of the territory.
Steve McIntosh, chief executive officer of CML Offshore Recruitment, delves into the issue of government fees and compares Cayman’s costs with those of Bermuda, another offshore location that suffers similar issues with the high price of goods.
“The cost of work permits is now significantly higher in Cayman than the equivalent payroll tax in Bermuda at typically 20 to 30 per cent of salary depending on job title,” he said. “However, Bermuda payroll taxes apply to all employees, not just expatriates. Overall, the total cost of payroll tax in Bermuda significantly exceeds the cost of work permits in Cayman.”
Remove retail import duties to save economy
Mr. McIntosh has one solution to increasing government revenues while at the same time encouraging local residents to make their purchases locally. He says he believes that it is high time the Cayman Islands stopped taxing the importation of goods that are routinely and easily purchased overseas to avoid duty (whether legally due to personal allowances or illicitly by not being declared).
“Waiving duty on clothing and hand held electronics imported for retail could mean tens of millions of dollars every year spent in the local economy instead of in the United States,” he said. “Not only would this provide a much needed economic stimulus, it would lower the cost of living for residents from the top to the bottom of the economic ladder.”
Mr. McIntosh said he believes that, as a rule of thumb, nothing that can easily be carried in a suitcase should attract duty when imported for retail.
“The current system effectively incentivises spending overseas to the detriment of local trade,” he said.
Buying local is good for everyone
Malcolm Eden, managing director with The Audiophile Group, said without a doubt, purchasing locally means that the money remains within the economy.
“This multiplier effect means that businesses can then pay staff, rents, utilities, etc., which in turn stimulates economic growth and job creation. Government also benefits from purchases made locally via assessed import duties, work permits and other fee collections,” he said.
With regard to government fees, Mr. Eden has a word of warning and said he believes that such fees need to be given due consideration to ensure that the right balance is met between stimulating growth in the economy versus raising money to provide the Cayman Islands with essential services such as healthcare and law enforcement.
Glenda Dilbert-Davis, FAB Cayman founder and owner, agrees that it is important to shop locally because it simulates the local economy, resulting in the provision of jobs and competitive salaries and pricing. She adds: “Additionally it promotes entrepreneurs and small business owners to achieve the ultimate goal of financial independence and success.”
If you are interested in seeing what local businesses have to offer, please visit CayShop at The Arc at Camana Bay from 25 to 27 October. This important event is free to attend and will give visitors the chance to enjoy a range of spectacular one-off specials.