Government eyes $209 million in immigration revenues

Earnings from PR, work permit fees increase

Premier Alden McLaughlin delivers the 2018/19 budget speech on Friday. - PHOTO: ALVARO SEREY

The Cayman Islands government expects to collect more than $100 million per year in the next two years from immigration-related fees charged for work permits, permanent residence applications, visitor work visas, Caymanian status fees and other permits, according to budget documents reviewed by the Cayman Compass.

The collections fall into both coercive revenue and fees for goods and services areas and are expected to make up approximately 14 to 15 percent of central government’s annual earnings in 2018 and 2019. The figures compiled by the Cayman Compass do not include non-work or non-residency related fees, such as permits charged to visitors who stay less than 30 days at a time, or for things like police background clearances which are often required for permit approvals.

Work permit revenues alone are budgeted to account for more than $70 million in revenue during 2018 and more than $72 million in 2019 – that is about 10 percent of central government’s total earnings for the year.

The work permit annual earnings represent a significant increase from the government’s 2015/16 budget year, when $63 million in work permit fees was collected.

However, the largest percentage increase in immigration-related fees comes in the area of permanent residence applications, according to the budget records.

Fees charged for the annual renewal of residency for individuals who obtained permanent residence after eight years of working in the islands are expected to generate $13.5 million during 2018 and $14.2 million in 2019. During the last government budget (2015/16), those fees accounted for less than $8 million in revenues.

Another $7 million each year is expected to be collected from individuals awaiting word on permanent residence applications or work permit appeals, those who are on what’s known as “permission to continue working” status. In the 2015/16 budget, about $4.4 million was collected in those fees.

Since June, hundreds of permanent residence applications from non-Caymanians who have been working in the jurisdiction for more than eight years have been approved, as immigration officials have made a concerted effort to hear those cases following a two-and-a-half year delay.

Through early October, 243 people have been granted the right to reside in Cayman for the rest of their lives. However, more than 800 people were still on the “waiting list” for those applications at the time. Government’s budget figures clearly anticipate a significant increase in the number of people paying yearly residency fees.

Those fees, based on the annual cost of the person’s work permit, are not charged to people who obtain permanent residence through marriage to a Caymanian.

There are a litany of other immigration-related permit fees collected by the government each year, according to budget records. For the 2018 and 2019 budgets, these include:

More than $1.1 million collected in Caymanian status fees

Approximately $650,000 collected from non-Caymanian individuals who are permitted to work in the special economic zone, Cayman Enterprise City

$1.2 million in fines the Immigration Department expects it will collect for various immigration-related violations during 2018 and 2019

$2.6 million in residency certificates for “persons of independent means”

$700,000 from individuals applying for and receiving naturalization status as British Overseas Territories citizens

$3.3 million in non-refundable repatriation fees employers pay to send workers back to their home jurisdictions following the expiry of work permits.

Long debate

The debate over whether Cayman’s government has become overly dependent on immigration-related fees to keep functioning has been raging for more than a decade.

Typically, the immigration fees are the third-largest revenue item in the annual budget behind import duties and fees charged to financial services-related businesses.

If the government puts a Caymanian in a job held by a work permit-holder, the argument goes, it loses the annual fee associated with that job. Similarly, once a permanent resident non-Caymanian receives Caymanian status (an immigration designation akin to local citizenship), they no longer must pay the annual fees for their job.

Premier Alden McLaughlin has said that creating a generally stronger economy will create more jobs for everyone, both Caymanians and non-Caymanians. During his budget policy address last week, the premier urged Caymanian workers to branch out into trades and vocational fields, as well as the more traditional banking and financial services industries.

“It is important to understand that there are many good, well-paying jobs available in the vocational trades in this country,” Mr. McLaughlin said. “As an example, as of June 2017 there were about 2,800 work permits held by people in vocational trades such as air conditioning technicians, dental and lab technicians, personal assistants and secretaries.”

There are another 3,400 jobs now held by work-permitted non-Caymanians for mechanics, electricians, carpenters, masons, painters and plumbers. In addition, he said, the hospitality and healthcare sectors are offering many opportunities.

Deputy Opposition Leader Alva Suckoo said Tuesday that while the premier is touting opportunities for Caymanians, his government’s financial planning appears to indicate government is planning for another influx of work permit holders and larger numbers of permanent resident non-Caymanians.

Mr. Suckoo said opposition members’ research indicated that government planned to introduce “another 2,000 new work permits” in the 2018/19 budget cycle.

“If you’re creating 1,900 new jobs, but your policies are creating 2,000 new work permits … where are the jobs for Caymanians?” Mr. Suckoo said. “It boils down to the government’s intention to rapidly increase the population. Clearly, our tax base is based upon consumption … but we’re growing that at the expense of Caymanians.”