Small business fee cuts start this week

Small and “micro” businesses in the Cayman Islands will get a big break on their trade and business licensing fees over the next year.  

A reduction in those fees took effect on Aug. 31 and will remain in place for the next year, according to the Ministry of Commerce. The tax breaks were announced as part of the government’s 2014/15 budget plan in June.  

“Micro businesses” – those employing no more than four people, excluding the owner – on all three islands are eligible to receive a 100 percent reduction on the licensing fees during the next year.  

Those micro businesses must have maintained annual gross revenues below $250,000 for the previous year. They also must have a certificate of good standing from the National Pensions Office, be up to date on health insurance payments for employees and have kept up on previous trade and business licensing requirements.  

Small businesses are also eligible for a somewhat lesser reduction in licensing fees. Small businesses are those that employ up to 12 people, excluding the owner, and which did not earn more than $750,000 the previous year. They also must be up to date on healthcare, pensions and licensing requirements.  

Small businesses in West Bay and George Town can receive up to 50 percent off trade and business licensing fees. Bodden Town, North Side and East End small businesses can get up to 75 percent off those fees.  

In Cayman Brac and Little Cayman, a 50 percent reduction for trade and business licensing fees is already in effect. However, an additional reduction is available to small businesses there over the next year for companies in good standing.  

The trade and business licensing fee cuts are not available to companies that provide auditing or financial services.  

“Micro and small businesses are the backbone of our domestic economy and we aim to support them in a variety of ways to enable their survival, growth and the creation of more jobs,” Commerce Minister Wayne Panton said.  

The trade and business license fee reductions were part of targeted tax cuts put in place by the Progressives-led government in the current budget year in a move to cut overall costs to consumers and small businesses.  

A reduction on import duties on diesel fuel supplied to Caribbean Utilities Company was also included. The permanent duty reduction, set to begin in January 2015, will cut the rate from 75 cents per imperial gallon to 50 cents per imperial gallon.  

The average customer is expected to see a 4.3 percent reduction on monthly power bills as a result, assuming fuel prices stay at roughly current levels, Finance Minister Marco Archer said. The fuel duty reduction will cost government $8.4 million in revenue during the 2014/15 year.  

The Progressives-led government also reduced import duties to “licensed traders” from 22 percent to 20 percent on “most items offered for retail sale,” again with the assumption that prices of consumer goods would be cut. 

The rate cut applied to import duty is already in effect.