Bush, who is known as “Mac” to headline writers in the Caymans, initially accepted the business leaders’ plan, but later responded by saying that the tax he refers to only as a “Community Enhancement Fee” would “only be withdrawn if alternative revenue measures that do not affect the ordinary Caymanian can be implemented”, the Cayman News Service reported over the weekend.
As reported, the Cayman Islands tax debate — which has now captured global attention, with coverage by a growing number of media outlets from the US, Europe and Asia — was sparked at the end of last month, when Bush announced that the government would look to introduce a 10% payroll tax on foreigners who hold permits that allow them to work in the islands.
Last week, the premier clarified that the tax would only affect those foreign workers who were earning $36,000 a year, but would start “at 10% on earnings of that level and above, and will not be incremental”, according to the CNS.
He has explained the need to introduce the tax as havinb been brought about by pressure from Britain’s Foreign & Commonwealth Office.
Statements issued by Cayman Islands business leaders opposed to Bush’s tax gave few details as to how revenue not raised by the proposed tax would be found, beyond saying “all areas of the economy” would be obliged to participate and contribute to the revenue enhancements, and that no “single sector” should bear the burden, a reference to Bush’s plan to tax foreigners only.
Said the Council of Associations, a group comprised of a number of Cayman Islands industry associations including its Chamber of Commerce and Bankers Association,in a statement dated Friday: "The Associations regard the [proposed] Community Enhancement Fee in its current form to be discriminatory, divisive to society and inequitable. This type of fee has been regarded as unlawful in other jurisdictions such as the Isle of Man and Gibraltar…
"We believe more can be done to reduce government spending and to generate cost savings…we believe that increasing the cost of doing business at this time may cause a loss of business to our competitors."
A public meeting has been scheduled for this evening, which is to be attended by the premier and the business leaders, according to the Cayman News Service, which, along with a Facebook page launched by Cayman Islands residents opposed to Bush’s tax plan, has become an important source of information for islanders trying to keep track of developments.
As if the tax storm weren’t enough, Cayman Islands residents are today bracing for the effects of a tropical storm, named Ernesto, which is due to pass south of the islands this evening, and in so doing to bring with it stormy conditions.