Government begins drive to collect $650M
(CNS) Members of the public and the business community will all need to dig deep over the remaining ten months of this financial year as the government seeks to raise a further 20% in revenue from the local economy. Despite the continued downturn and economic difficulties faced by many businesses, particularly small enterprises and local retailers, the government is hoping to squeeze the most cash from the community in the history of the Cayman Islands in order to cover the cost of government and to return a significant surplus. The government is in the process of amending laws and regulations to allow it to collect some $90 million more in fees.
Although the country’s financial services sector will bear the greatest burden, new fees for boats, extra duty on tobacco and alcohol, as well as work permit, stamp duty and planning fee increases and a rise in tourism taxes will impact a wider cross-section of the community.
According to the annual plan and estimates, despite the economic difficulties facing the local economy, government hopes to boost revenue collection from the offshore industry by some $60 million, while it hopes to raise more than $13 million extra in duties compared to last year and close to $10 million more in work permit fees.The tourism sector will also be coughing up another $5 million in accommodation and departure taxes.
In total government will collect over $590 million in coercive revenue — duties, taxes and fees — and will collect the remaining $60 million from entity revenue.
With government unable to borrow and with no supplementary appropriations allowed as a result of the agreement with the FCO and its conditional budget approval, government will be heavily dependent on producing the revenue measures which will produce the projected $82 million surplus.
For the first time government has based its earning projects on a 75% rate of compliance rather than a 100% compliance expectation, as it had in the past. This means that government anticipated that it will be able to collect three quarters of the fees it has mandated, placing it in a better position than in previous years.
However, the government has based its assumptions on a predicted growth during this financial year of some 2.3% in GDP and a fall in the unemployment rate of three points to 5.9% against the backdrop of a world economy predicted to grow by less than 2%.
Category: Politics
I kept ignoring this story because it vexed me so. Bear with me, I have a few things to get off my chest.
I believe that small business are the drivers of our income. Middle class workers, middle income. There is no "trickle up" theory, and the rich have learned how to keep their money.
It occurs to me thatif a person were to create an algorithm — a step-by-step flowchart or formula — for destroying small business, it would look a lot like the fees and taxes proposed by this government amendment. It's completely absurb. We have already priced ourselves partially out of the tourism market, and now, as an extra added bonus, we're going to make their stay here even more expensive? These 'amendments' are going to kill the struggling small business community.
We should be crafting breaks for small business, not penalising them. When small business grows, economies grow. In the past two years, we have all seen many businesses close; commercial properties for rent are profound.
Every day I become further convinced that our ruling party has no conception of economics.
I am working on a profit margin of 5%. Stick a fork in me, and add me to the list of small businesses who hire locals that will no longer be able to afford to operate. My Daddy always said that I should become a farmer, because he believed that farmers and fishermen were among the purest of occupations, and that at the very least a person would always feed his or her family. Guess he was right…….. I only feel foolish for daring to believe the promises shoveled out at our feet in 2009.
Be safe all. It's going to be a bumpy ride. Let us work together as never before.
To continue to belive anything this government says it will do is the definition of insane. To plan on CIG failing to do something is the definition of smart.
I'd like to know how much govt revenue increases for every extra dollar charged in fees.
It would not surprise me at allif the net result of these fee increases is a decline in overall revenue as companies take their business elsewhere or just close their doors because it is too hard to make a profit.
Wouldn't surprise me either if the budget numbers are based on the exact same level of business and takes no account of the fact Cayman will be less competitive versus other offshore jurisdictions.
You can keep "your island" and its Caymankind "welcome" I will be takeing my family, my skills and my money where we can enjoy it. We have been planning on it as rollover is looming over our heads but why wait? Really! Why? Good luck to those we will be leaving behind.
I am so tired of certain persons who have decided to leave, for whatever reason, posting rubbish about "Caymankind " etc. I want to tell you people, that I work in a financial institution and hardly a week goes by that I don't get a least three emails, from persons overseas inquiring if we have any vacancies. I am sure other institutions get those emails as well. Overseas applicants are still lining up for the few vacancies that exist in Cayman. You came here to work and I am sure you got paid for your labour. I am sure your employer must have been pleased with your work for the past 7 years or so, considering that you are nearing roll over. You had your time and you should be more grateful to your host country for the past several years. Some of you need to remember that This "little rock" cannot accommodate everybody for infinity. At some stage some of you will have to go "home". I have always believed that "when you can't go anywhere else you can always go home" I wish you well whichever path you may take, but please remember that no one is indispensable- we can all be replaced. Be appreciative and less bitter- Cayman was good to you.
I wasn't posting rubish. I was stating my opinion on something I know about. You are stating your opinion on something you know nothing about. Me. Thats the rubbish I do not care for here. Cayman was good to me. The Caymanian people and what passes for government was not. End of story.
Its not the rollover, its not the job. Its all the Caymanian crap you have to deal with here. Otherwise its just another place.
Hope your spelling improves in your new destination. Good luck to you too.
It was one typo. That was abut 4 less per sentence that 20% of the posters on here.
And as if to prove your point you made two typos in this post. "Takeing" is as frequent a spelling mistake on here as "rediculous".
Isn't "takeing" the only typo?
I don't believe "takeing" was a typo at all, but I do accept that "abut" and "that" in the subsequent post ("That was***abut*** 4 less per sentence ***that*** 20%…") were.
You can add 2 more typos.
Identify them please.
"That was abut 4 less per sentence that 20%"
Identified.
Definately.
Once again, Government is running in the completely wrong direction.
Making a problem worse than better.
Every dime Government extracts from the private sector raises the cost of living. And
it does not matter how innovative or creative any fee or tax is. Someone has to pay
for the cost of government, and that is not the government. It is from people and
businesses trying to sell products and services.
Too bad for us that many people do not know that it is them who are paying, through
higher prices for everything, and inflation.
What the Island really needs is a crash course in basic economics. Everyone needs
to read and understand Adam Smith's "Wealth of the Nations"
Price of groceries going up again, thanks to the wasteful policies of our wannabe socialist government. All the talk about “inward investment” is BS. When they want more money they tax existing businesses and the already suffering general population. The “inward investors” get duty and tax concessions and we pay the bills through ever increasing taxes.
after 3 failed years of trying to tax themselves out of recession…what does our great leader do?….yep increase taxes……zzzzzzzzzzzzzzzzz………. goodnight cayman!
Caymanian retailers will suffer most from these increased fees. I will only buy the necessities here, go on vacation to USA and buy my clothes, and household items. I am also boycotting A. L. Thompson's Home Depot due to Mr. Thompson's Chairmanship of the CPA's latest decision to allow destruction of mangroves in south sound, even against the advice of the planning department and DoE.
I will no longer patronize A.L. Thompson for the same reason. Facebookers, are you listening?
A.L.Thompson – Chairman CPA – his board decides what development takes place.
A.L.Thompson Ltd – supplies the developer with materials for development to take place.
No conflict there then. Ooops forgot. He's Caymanian. It's OK then.
No, he's UDP. It's OK then.
Lawd mi head a hot mi…..mi nuh kno how much more a dis foolish govament mi cah deal wid. Raatid idiot dem.
The official language of the Cayman Islands is English. Could you please try to remember that.
i thought caymaican was the national language?
Your comment reads like an uneducated idiot. Try to learn some proper English before you post again.
You must be one of those expats our government tried to tax.FYI – I can speak and write proper english. If you were familiar with caribbean culture/chat you'd understand me without a problem.
Talking like an idiot and not expecting anyone to treat you like one is foolish. You should save it for talking to those who can relate. But you won't will you?
English is the only offical language of the Cayman Islands. It's in the Constitution.
You cannot write properly, as evidenced by your failure to capitalise "English" and "Caribbean". It is further evidenced by the use of the word "you'd" which should never appear in writing other than when quoting direct speech.
For heaven's sake – these are posts on a news website, not articles in scholarly journals! A little too AR I think but since you brought the subject up its "official" not "offical".
Even in the darkest hours, there is still the faint signs of light. Thank you for your worthy contribution. "You'd" is one of the most disgusting things one can see in print.
From one 'expat' to another….you're making yourself sound very foolish! Wanna teach, the children may need ya….wanna preach, the church may need ya. Wanna be 'official'…the government definitely needs ya!!
Cuh pan pot a cuss kettle?!? You criticize me for failing to capitalize the words English and Caribbean when you can't spell official? I suppose you will say now it was just a typo. Guh back a yuh yawd mi yute! YOU'D be better suited there. BTW – It's a contraction for you would!
Signed,
Yo fwen
Smarty-pants
There is a world of difference between a single typo and repeated crimes against grammar. Contractionsreally have no place in written English for contractions other than quoting direct speech.
1. Is "It's" (as in "It's in the Constitution") a contraction?
2. Your second sentence is a bit jumbled. I suggest you delete "for contractions".
And your comment reads like an arrogant self-righteous pompous git. Please refrain from embarrasssing those of us who do accept and understand the spoken and written patois, that is inevitable in any country or territory in the world, whether English owned and/or speaking or not. I understood and agree with the post perfectly well. If you can't do that and/or stay on topic then perhaps say nothing at all, because attitudes like yours do not help anything.
I'm sure visitors and businesses will be happy to pay all this additional money, it's not like they have anywhere else to go right? And it was so cheap here before!
I moved away from Cayman several years ago. It was a bitter-sweet move.
Bitter because I loved the culture, lifestyle, and my Cayman friends.
Sweet because I significantly improved my financial position.
Cayman is a great place to live. Too bad that the financial numbers don't work. Sadly, over the next 5 years, things will get worse before they get better.
The financial hole that both the PPM and the UDP have dug is very deep indeed. I suspect that a number of entities will choose to move rather than stay and pay the high cost work permit fees.
The Laffer curve is a reality.
A Failed State: The fact is that Cayman is on the 75th percentile of the Laffer Curve, moving to the 90th percentile. It's pretty much straight down from here, to the point where all economic activity either goes underground or goes to another off-shore jurisdiction. I practice law doing international structuring on-shore, using off-shore vehicles, and I am simply not using Cayman vehicles anymore due to both the current and anticipated costs of doing business in Cayman, as well as the anticipated acceleration of costs and the unavoidable political and economic instability as Cayman falls the rest of the way down the Laffer Curve to its ultimate economic failure. Increased taxation in economic recession always leads to increased recession, and further increased taxation leads to economic failure. 100% taxation of zero economic activity equals zero public revenue, which equals a failed state. McKeeva's been all over the world on the tax-payer's dime… surely he's gotten around to Greece and seen how it's worked out there. I'll give it 3 years until the UK needs to take over, and my clients won't be structured in Cayman when it happens.
I agree though – the beaches are beautiful. Kind of like the beaches in all the other Caribbean islands.
Why is it that all of a sudden we have all these 'onshore counsel' posting on CNS telling us how they are not going to use Cayman vehicles anymore and prophesying doom for us? In my many marketing trips have not met one NY, Chicago, Boston, L.A. or London lawyer who could be bothered to do that. Most of them are only dimly aware that we have a premier and certainly don't follow his travels. What would be the point? If they did make that decision we would know nothing until we realised we were no longer receiving instructions from them. Clearly it is intended to influence others and done by someone with a vested interest. It sounds like a marketing ploy by our offshore competitors instead.
And it is all hysterical hyperbole. Cayman is not a "failed state" by any definition of the term.
Where did you move to? What do you do for a living? How is it better than Cayman? We too, are considering saying farewell to the Cayman Islands. It is just so unbearably expensive that we are starting to wonder whether it is still worth our while being here. We have not had payrises and bonusses in 3 years! Yet, the prices keep on climbing.
We Moved back to the states. Same money after taxes and we get to see and enjoy our tax dollars at work everywhere we look. The police work for us and are dependable as are our government employees. Its nice to live in a country where everyone shares the load. Sure there are some things that could be better but after leaving Cayman we could see that it is a third world country in a suit. And getting worse by the day.
So this famous budget is based on revenue increases that might not materilalise?
Might not? I promise you it will not materialise, and spending will run over budget, and the surplus will never be mentioned again and the situation will continue to deteriorate. It's not even the beginning of the end, it's about the middle of the end I think.
And it will be the PPM's fault as usual…..
3+ years of waste, squander and mismanagement from govt. Now they want me to foot the bill?!?! I think not. Just try and get it from me, I have nothing left, thanks.
Try 15 years of waste, squander and mismanagement.
some folks around here got money to spend, anyone else noticed all the newly registered cars?
It be the government and civil service.
The Government should bring in a property tax (call it community charge) and apply it to ALL property here based on a sliding scale. Our rich folk, foreign and Caymanian, pay disproportionally less "tax" than the rest of us. Recently, for the first time, I was invited to a reception (held by Cayman Status holders) in a gated community off the West Bay road. I wont name it because CNS doesn't like names in such posts it seems. I was utterly astonished at the sheer wealth in evidence and one house was pointed out to me as owned by a born Caymanian accountant/partner in a well known local firm with movie theater and other extraordinary facilities and I was told that when he entertains he flies the food in from Miami. This sort of obscene wealth in a country where several thousand Caymanians are on Social Services benefits is lamentable. The super rich, expat or Caymanian, need to be taxed to contribute to the place they made their wealth.
Has anyone noticed all we are hearing in the press is how much increase (total) everything will be but has there been an acutal breakdown in what the costs will be and who exactly will be paying the increases?????
We are really screwed, if you thought you had to wait a long time at certain government offices example Immigration, wait till the cut backs start…lately everytime you go to Immigration everyone is either on vacation or sick. Today it was a 3-4 hour wait for your number to be called, this seems to be an everyday occurrence now. We are paying more and more for a service and the service just gets worse and worse.
You will get multiple thumbs down for this suggestion, 20:17, and I have to admit I would not want to have to pay anything more than I am paying now just to get by, unless it was tied to a reduction in duty rates or something. But the point you make about the gap between the super rich and the poor is well taken. It is typical of capitalist countries (America has its 1% as they are now called) but is even more disturbing in small communities such as ours.
On the surface of it, your suggestion has merit, but think about this: What about the farmers, who work hard and earn little, scraping out their bit from the land? What about native landowners who lack the funds to develop them? I can understand an assessment based upon developed properties, but not one based upon land.
Fair comment! Thanks. That's where the "sliding scale' idea comes in but I accept that the devil lies in the details as they say.
Good luck getting another cent from me. Still waiting to see what all the money you already got from me was spent on. Aside from the turtle farm/Cayman airways/Civil service welfare group, court settlements for being stupid and proud of it, and the ultimate travel/hotel/food benifits that the Government is so fond of.(were is Bush now and how much more is that going to cost me?)Or is that none of my business? Never mind. I know the answer to that. You want more of my money? Your going to have to work harder to get it. No more mister nice citizen.
My crystal ball says that by the end of the year thousands of funds and companies will shift to more friendly and lower cost jurisdictions like Belize, and Panama etc…
Be careful what you wish for! 17;10
I dont think 17:10 was wishing for it, but it is Mac and his UDP that will make it happen!
Knot S Smart you are so right about companies shifting to lower cost jurisdictions one only have to look at what is happening in our financial industry. The BVI is giving us lots of competition in financial services and tourism.
I'm looking at BVI now for a structure, and the VISTA trusts can do everything that STAR trusts can do, and the quotes are coming back very favourably. That and the fact that a corporation is a corporation is a corporation (and BVI's are much less expensive than Cayman's) leads to a comparison where Cayman might have been the presumptive place to go once, but it's clear that there's no reason to go there now.
More like BVI lawyer calling.
Never actually been there, but if I were a BVI lawyer I'd be eating your lunch 10 ways from Sunday. This is a marketing opportunity of a lifetime for the rest of the off-shore jurisdictions: Cayman's hedge fund industry is up for grabs, and it's suddenly very portable.
I don't believe you are really a London lawyer for a minute. You seem to have a vested interest in encouraging others to move to the BVI. If and when those decisions are made by onshore lawyers they are not concerned to post on CNS to tell the world about it; they just act on them. This is clearly intended to create a herd effect.
If the cost of companies determined where hedge funds were domiciled BVI would have had the lion's share many years ago.
While I agree that Cayman's financial services are in a competitive arena and we are probably at the limit of taxation for them, "thousands of funds and companies" are not going to shift to Panama by the end of the year because of the increases in costs here, and Belize is out of the question. Ditch that crystal ball.
Yes of course raise prices. People already can’t afford to survive but we just increase some more. But is gov’t gOing to cut spending ??
Past time to face the truth. Caymanian government is not smart enough to cut spending. They have no discipline and never did. Your asking a 5th grader to do college education work. Thats stupid. They will not save Caymanians from themselves. Caymanians are what they live off of.
Really – well my pockets are empty – not having had a raise for 5 years and paying these ridiculous prices for everything in Cayman. My strategy is to spend as little as possible here and get value for money in the USA, if I can scrape up enough money for the airfare. Sorry UDP if you can't see that you are killing off small businesses and chasing away financial services providers, then you are blind and stupid. The private sector has had enough of funding your parties and travel. Its time someone gave us a break. You are killing this economy. Look around and see how many businesses have closed. You must all be idiots not to see what you are doing to Cayman.
They cannot see what they are doing because they are never here to begin with and the bottom line is they don't give a sh*t.
Its almost as if they think that by rasiing prices again and again and again, it will somehow attract business to this island.
Clearly that has worked because they have so many new projects going on right now…..
Something doesn't add up at all.
And come May, if not before, the truth is going to reveal itself finally and we are all up the creek with no paddles.