Cayman Finance chair says UK MPs still don’t get it

| 16/11/2010

(CNS): Following a question asked in the UK parliament last week by an opposition shadow front bench member Anthony Travers has said that he believes that some UK MPs don’t understand the Cayman Islands and are not capable of proper debate on the issues. As a result of a question by Emma Reynolds MP to the new OT minister about why the British coalition government had approved borrowing for Cayman when it had still not introduced direct taxation, Travers has again taken up his pen. “Evidently the level of understanding of the Cayman Islands still demonstrated by some UK MP’S falls far short of the minimum standard required for proper debate in the House,” the Cayman Finance Chair said.

Travers said it was possible that it arises from poor briefing and it was the role of Cayman Finance to assist in improving the level of understanding which was why he had decided to write directly to Reynolds.

On 9 November Emma Reynolds, a member of the shadow foreign affairs team, asked Henry Bellingham why following comments by the Chief Secretary to the Treasury about the unacceptability of tax evasion and a crackdown on those hiding money offshore, the OT minister had abandoned the demands of the previous government for Cayman to give up their tax haven status and introduce some form of direct taxation.

Bellingham told the opposition member that the previous minister, Chris Bryant had approved borrowings of £217 million last year with conditions attached and this year he had approved a further £123 million, with the same conditions. “For the Cayman Islands to get their economy moving again, we strongly feel that they need to maintain their offshore status, and we are following the policy of the previous government,” he said in the UK parliament.

In the wake of this parliamentary question Travers told Reynolds in his correspondence that the question she asked perpetuated fundamental misconceptions concerning the Cayman Islands and said that, “tax evasion is off the table as far as the Cayman Islands is concerned,” in his letter which was copied to Bellingham.

“The Cayman Islands has instituted proactive tax reporting on every bank account with every Treasury Department in the European Union, pursuant to the European Union Savings Directive 2005 with which it fully complies,” he wrote.

He denied that the Cayman Islands was a jurisdiction where individuals or corporations can “hide money” and said that Reynolds may be confusing the Cayman Islands “business model with that which until recently existed in Liechtenstein and Monaco and which to a great extent still exists in Switzerland. “

The Cayman Finance chair said that tax avoidance was lawful but that still had nothing to do with Cayman and said that was down to UK, tax legislation.

He said the “tax neutral platform” in the Cayman Islands for international financing transactions has nothing to do tax evasion.

“Cayman Island entities pay taxes in the jurisdictions where the profits are made in accordance with the laws of those jurisdictions,” he said and said if she was calling Cayman a tax haven because it collects revenues through indirect taxation and not direct then she was correct but that nothing to do with the issue of tax evasion or tax avoidance.

As chair of Cayman Finance Travers has committed to putting pen to paper whenever he believes politicians, columnists or other public figures have misrepresented the jurisdiction. Since taking up the chair of the offshore industry body he has written to a number of British newspapers as well as European members of parliament and members of the United States congress.

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  1. Anonymous says:

    He’s doing a good job but his style is too preachy and indirect.  We need a clever and pretty girl to say: "The Cayman Islands is part of the Kingdom of great Britain" and "A healthy and vibrant alternative offshore jurisdiction is in the Kindom’s best interests when directly competing with China sponsored entities like Hong Kong and Singapore"

    "London is never going to Woo every multinational seeking jurisdiction in China centric havens like Hong Kong,  Britain needs Cayman because Cayman is in Britain’s long term strategic best interest"

    We need to point out these obvious truisms with a smill and a youthful spring in our step. Crotchety, preachy old men are unwelcome, regardless of the correctness of their message.

    When I hear Travers speak I hear the same stilted arrogance that flowed from Conrad Black.  We know how things ended for him.  You can be right and still come off wrong. 


    • Anonymous says:

      "The Cayman Islands is part of the Kingdom of great Britain"

      Nope, we are not. We are an overseas territory of the United Kingdom of Great Britain and Northern Ireland. We are not "part " of the UK.  

  2. Anonymous says:

    There is a philosophical history against direct taxation, and it’s not as self-evident as the MP’s might like to believe.

    A recording from a seminar on the history of taxation:

    The US founding fathers and the ancient greeks did not think highly of it.

    • Libertarian says:

      That’s because the ancient Greeks derived their morality from Socrates, Plato, and Aristotle; especially, Socrates. If these figure heads of western thought were living today, do you seriously think they would sanction tax – "legal theft"?  They would never dream of a large government, so large that it has interfere in all aspects of our daily lives.

      • Anonymous says:

        They singled out direct taxation because it leads to your last statement.  The greeks, from the above source, used indirect tax and attributed it to their ‘liberty’. 

  3. Anonymous says:

    Keep up the good work Mr Travers. Well done.

  4. Mike Hardy says:

    Don’t you think the extra transparency already in place and the threatened tightening of tax laws elsewhere inevitably reduces Cayman’s strongest reason for operating from Cayman? Tax evasion or avoidance?

    A change in Cayman’s tax base will not change that.

    • Caymanite says:

      You make the same mistake as the UK Socialist MP. On each occasion when transparency in Cayman was increased from 1984 onwards deal flows to Cayman increased not decrease

  5. Rafaelle says:

    Mr Travers is right but the years needed to correct this pitiful situation are long gone. Those who benefited from Cayman’s lawless image back then, now strut around here as if we should be ever so grateful to them and their visionary and so called pioneering spirit, when they were and still are nothing short of economic pirates. Everything they did was for their sole benefit and yet they try to falsely preach it was for this island. I certainly do not see any of them helping and all they seem to do is criticize constantly persons like Mr Travers. With the image we have built up over years, the problem now is that they never will Get it. We need to start holding these visionaries accountable and responsible for the current state of affairs. That would be a excellent start Cayman.

  6. Anonymous says:

    Tony Travers’ XXXX undiplomatic approach is the reason why we have come under so much pressure from EUmember states in particular.

    Cayman is learning the hard way that you cannot beat large countries like EU member countries into submission. We simply don’t have the wherewithal and resources to do it !

    No wonder Travers is so cuddly with McKeeva…….they are two of a kind….same attitude and approach which does not serve our best interests.

    Of course McKeeva doesn’t see the bigger picture and he’s just happy that Travers is just like him.


    • Libertarian says:

      This has nothing to do with Mckeeva!  Revenue needs to be created and spending cut. That is where borrowing come into play. To introduce direct taxation in order to pay off the deficit, will hurt the financial industry more in the longterm, because investors will pull out and our competitors will have an advantage over us. The good thing with borrowing – at least, in creating revenue projects, we will be able to pay it off. Direct taxation will also increase the size of government. Government would end up having to pay more just to implement a taxing system! 1. Borrow, 2. Make Money, 3. Cut expenses, and 4. Reduce Government down to its essentials – for a better economy. These MP’s know very well that taxation need not be a part of that process.  


      And please don’t associate Anthony with the Premier!

      • Anonymous says:

        "And please don’t associate Anthony with the Premier!"

        I am afraid that "Anthony" does that all by himself. No help required. He has skewed this discussion about immigration policy by suggesting that trying to avert ‘blame’ for the ‘rollover policy’ from the Premier’s previous govt. by saying that it had not been implemented as intended by them. He has inserted himself into the discussion re govt’s deficit by  suggesting that it was not in any measure caused by a shortfall in revenue (and there clearly was a shortfall of some $20m last year) but instead solely because of the capital expenditures of the previous govt.  He’s made clear that the increases in work permit fees introduced by the UDP Govt. were his/Cayman Finance’s recommendations, for example, and this is what has caused some additional hardship for Cayman as the costs of doing business has risen accordingly. That is what has hurt the financial industry. 

        "To introduce direct taxation in order to pay off the deficit, will hurt the financial industry more in the longterm, because investors will pull out and our competitors will have an advantage over us".

        Obviously whether that is true or not would depend upon the nature of the direct taxes. One simply cannot make such a broad sweeping statement. It may come as a shock to you that our key competitors already have some forms of direct taxation.

        • Libertarian says:

          @9:33  Sir or Madam, what key competitors?  Don’t be deceived!

          Yes, there are some financial centers that have systems of direct taxation. However, more centers around the world, have the advantage of a better economic base than us! Out cost of living is too high!  Some places can just manage and survive with a direct tax – no harm to them, because they have more than tourism to rely on!  Note that 50% or more of our clients that choose to come to Cayman, are attracted to us because we are tax-free! That is no secret in the financial world!  Cayman has become properous from the 1970’s to 1990’s because of our appeal to investors. We just offered a better deal where other places were considered "unjust" because of their tax regimes. Please don’t be fooled! Look at some of the big competitors like Burmuda, Singapore, Ireland, Virgin Islands, etc… If I had a pie chart, I can show you… about 80% of our revenue comes from import duties and the financial services. Hence, in introducing "the notorious" direct taxation here, our policy makers would have to be smoking herb. 

          Also, we can not introduce direct tax here, because we do not have a fiscally responsible government! Cayman has a fiscal dilemma, the dilemma of SPENDING TOO MUCH since 2005!  Introduce direct tax now and I guarantee everyone will feel the weight of a fiscal nightmare!  Don’t let no English expert tell you that it will do us good!  I hear the UK people have many complaints against their own government with tax – a very heavy burden! Between 2004 to 2008, our International Monetary Fund revealed that government spending grew larger each year until we were hit by the global recession. Seeing the type of government we have, introducing direct taxation will end up destroying Cayman’s industry!

          O yes, another thing to consider – to introduce and sustain a system of direct taxation, would require legislation of compliance. Government would need to pass various and numerous laws.  A new court would have to be introduced to deal with taxation alone. Government would have to increased its size by employing more people, such as, tax collectors and draftsmen. Government would have to increase the taxes itself in order to maintain its size! Our society will become more complex and the number of laws and violations will increase, as the cost of living sky-rocket because of investors pulling out for Ireland or some other place of better tax deal.

          Peace :o)

          • Anonymous says:

            In answer to your question re key competitors that have forms of direct taxation, they are: British Virgin Islands, Bermuda, Jersey, Guernsey, Isle of Man.

            No one is arguing that Govt. should not be fiscally prudent. In fact if voters are directly footing the tax bill they are more likely to hold govts accountable so that they do not spend too much.   

            • Anonymous says:

               I respectfully say you would be hard pressed to find examples of your last statement.

              • Anonymous says:

                The BVI is an example where payroll tax is used and they fared quite well during this recession. Even at its height last year their deficit was a mere $7.5m. This year they project a budget surplus of some $21m ($271m vs. $250m).  They will do so by streamlining public expenditure and restructuring their revenue base, e.g. making payroll tax more progressive.  

  7. livingcayman says:

    I agree with Mr Travers the MP still doesnot understand the Cayman Islands and what it has done in regards to transperecy.  But the facts the borrowing under this current Government is done, it is a known fact the the UK Government does not like the current rule and will squeeze them in every way they can.

    If you don’t believe why didn’t the previous Government had to jump through such big hoops to get anything done with the UK Government.

    The UK Government can see the truth behind each Government why can’t we?

    • Libertarian says:

      Despite government’s failure in compliance with the Public Finance Management Law and balancing the budget, the UK government need to respect the democratic representation (cabinet), voted by the people of these islands. They should not trample on our democracy and impose direct taxation here. Your argument is no moral weight – no ethical foundation!

  8. Anonymous says:

    “Evidently the level of understanding of the Cayman Islands still demonstrated by some UK MP’S falls far short of the minimum standard required for proper debate in the House,” the Cayman Finance Chair said.

    The situation is very similar with Cayman Islands backbench MLAs, with the exception that their understanding falls short regardless of the subject. That’s why Big Mac, who demonstrates a genuine lack of understanding himself, rarely allows them to speak.

  9. Anonymous says:

    too bad he misspelt the webpage url.

  10. Anonymous says:

     I wish he would shut up and I wish Mac would stop listening to him. 

    • Dred says:

      Seems like we all feel you should do tha same.

      It might just be the only thing good going into Mac’s ear these days.

    • Anonymous says:

      So you want to one man around here who knows what he’s talking about to shut up, and the one man who knows nothing to stop listening to the man who knows what he is talking about?

      Perhaps is you who better shut up?

    • Just curious says:


  11. Dagny says:

    Thank you Travers once again, for correcting the falsehoods that are perpetuated by people who ought to know better.   Changing perceptions is a long road, but it will be worth it.


  12. anonymous says:

    Tony for Premier!!!

  13. sammy says:

    This is more reason why we shouldn’t expect anything better coming from the UK’ MP’s nor from the Foreign and Commonwealth Office, that strongly recommended for us to introduce DIRECT TAXATION!  They are a bunch of law-makers that know nothing about the people and the economy here!

    If we ever introduce DIRECT TAXATION, all other countries that are competitors to the Cayman Islands, will have an advantage over us, and investors will pull out, leaving our economy in a worse state. The FCO and the Governor very well knew that this would had happened if we took their scary doomsday’ recommendation.  We would have been like TCI – helpless and ever dependant on Mother!

    Anthony is doing a good job!  We need more educated MP’s representing us in Parliament!