Archive for July 12th, 2012

Bush defends tax giveaway

| 12/07/2012 | 74 Comments

cashgift.jpg(CNS): The premier has denied that there is anything unusual in the decision to allow Dart Realty Cayman Limited to collect 50% of the taxes paid by guests in any of its tourist accommodation as part of the ForCayman Alliance deal. In a statement broadcast on Radio Cayman on Tuesday evening, the premier said that hotels around the Caribbean and the world are not getting built without incentives, as he accused MLA Ezzard Miller of being mischievous when he exposed some of the deal government and the NRA signed with Dart last December. McKeeva Bush said his priority was to create jobs and that was why he agreed to the various incentives.

“Other countries offer tax incentives, such as tax holidays, with taxes either waived or deferred. In the Cayman Islands we are doing the same thing,” he stated. “These are not taxes that the government is currently collecting; these are taxes that would only be earned by the government if the hotel is first redeveloped and then if the hotel is occupied with paying guests on a nightly basis."

However, the agreement states that Dart will also be able to collect taxes on any existing hotel it buys or acquires over the next thirty year period. This means that if Dart Realty or anyaffiliated company purchases the Ritz-Carlton, the Westin or any other local hotel, government could lose half of an existing revenue stream.

Nevertheless, in his latest statement  Bush justified the generous terms of the agreement pointing out that hotels in the Cayman Islands have been closing or are being transferred to long term residency.

“In the last ten years, we have lost the majority of the rooms in the former Hyatt Hotel, the Sleep Inn, Indies Suites and the Courtyard by Marriott, the one now under discussion. We need new hotel rooms; that’s the way we can grow our tourism," he said.

The 100% customs duty waivers would apply only once per hotel redevelopment, Bush indicated, and only to “major hotel redevelopment”, and Dart was expected to create an additional 200 to 300 new hotel rooms over the next few years. Bush said this would stimulate the economy and contribute to government coffers as a result of the multiplier effect, commonly referred to as trickle down.

Attacking Miller, the independent member for North Side, over his decision to reveal parts of the Dart agreement leaked to him last week on CNS, Bush said that once completed, the final NRA Agreement, any amendments and the results of the independent review would be made available to the public.

The premier accused Miller of being irresponsible for releasing the document out of context as he accused him of not following due process.

“Mr Miller preaches due process every Tuesday and every opportunity he gets, although he didn’t follow it many times himself. However, for his own politricks he is more than happy to mislead the people and not follow the same process he preaches about,” Bush stated.

The premier asked the public to focus on the economic turnaround and the need to create jobs.

“We’re trying to get money flowing into the country and allow people the opportunity to get jobs to take care of their families,” he added. “A closed hotel cannot help us and anything we agree with Mr Dart’s group of companies in regards to new hotels will benefit the Cayman Islands more than the revenue we choose to give up,” Bush claimed.

See premier’s full statement below

Check back to CNS on Thursday for the complete Dart, NRA and government agreement.

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