Charter fishermen and water sports businesses may have been mistakenly charged licence fee increases designed as a luxury tax on wealthy yacht owners.
Measures, introduced as part of the current 2012/13 budget, increased annual licence fees on some vessels more than ten-fold.
The new rates, which operate on a sliding scale depending on the size of the boat, were intended as a revenue generating measure targeting wealthy private individuals. But small business owners renewing their boat licences with the Port Authority of the Cayman Islands have complained that they are being asked to pay the fees as well.
Now government is introducing a Cabinet paper to clarify the regulations and make a specific exemption for commercial operators who can produce their trade and business licence.
Cabinet Minister Cline Glidden said the fees were aimed at private boat owners not as an extra burden on small businesses, who he said should not have been charged. He said he had received several calls from business owners who had been told they would have to pay the new fee.
Mr. Gildden said he was hopeful that only a few, if any, had actually paid. He is urging commercial operators to hold off on renewing their licences until the law is clarified.
“There was specific exemption but apparently it got miscommunicated. We are proposing to clarify that very quickly,” he told reporters during a Cabinet media briefing last Thursday.
Speaking after the briefing, Mr. Glidden added: “I do know of individuals who have gone to do the licence, they’ve asked about this and they’ve been told, ‘yes, you have to pay’. I’ve told them we have an amendment coming and to hold off.
“It wasn’t clear in the law,” he added. “I don’t know if there is some that may have paid it. What we do know is that we have been getting a lot of questions.
“That was never the policy intention. To make it clear we are taking a paper to Cabinet so that those individuals that do the licensing will have the authority to actually exempt them.”
The biggest fee increases at the last budget were on boats more than 30 feet.
Rates on vessels between 31 and 40 feet went up from $300 to $1,000. For vessels between 41 and 50 feet, the rates went up from $300 to $2,000. Similar scale increases were introduced on a sliding scale up to 100 feet.
The top rate previously was a charge of $1,000 for boats of more than 70 feet. Under the new scheme, a new range of upper tiers have been introduced. The top rate is now $10,000 for boats of more than 100 feet.