Premier Responds: Cayman 10% Tax For Expats
[Updated with Premier Cox's response] The Cayman Islands will be introducing a 10% tax for foreign workers earning over $20,000 per year, the Cayman media reports.
Although revenue expectations have not yet been confirmed, government hopes to collect around $50 million from the new tax reports said. Cayman Premier McKeeva Bush said he did not want to impose the tax, but he had no choice because the United Kingdom was demanding a sustainable budget.
“The [Foreign and Commonwealth Office] insisted that the Government strengthen its fiscal position by implementing a greater level of expenditure reductions than had hitherto been made by honourable ministers and senior civil servants. The concern is to make expenditures more sustainable going forward into future fiscal years,” Mr Bush said in a statement.
“Government has opted to introduce a Community Enhancement Fee that is linked to the remuneration level received by work-permit holders in the Cayman Islands. The Fee – which is payable to Government – will be charged in respect of remuneration levels that exceed $20,000 per year. The employee on a work-permit will make a contribution to the Fee – which will be calculated at 10% of the employee’s remuneration,” continued Mr Bush.
Earlier this year the Cayman Premier hit out at Bermuda saying said that while Bermuda has been the champion of the insurance and reinsurance industry, the Cayman Islands was now a better choice and could grow “without the malice, without the inhibitions of race, without the inhibitions of transport.”
Mr Bush said Cayman was actually taking action while Bermuda was only still talking about making changes. “In the mid Atlantic they say they ‘may’ reduce some fees; we have reduced fees,” he said.
Update 7.22pm: The Premier and Minister of Finance Paula Cox offered the following response in light of news regarding the Cayman Islands’ levying of a payroll tax on its guest workers.
As it specifically relates to their criticism of other jurisdictions including Bermuda, Premier Cox said, “To be clear, this is not the first time that Cayman has made disparaging remarks about other jurisdictions in order to cover up the problems that he has had to address in his own Country.
“In fact I spoke to his comments as far back as September 2011, and I am of the view that there really isn’t nothing new to add. Back then, I noted that: ‘I was recently at the Overseas Territory Conference in the UK where Cayman signed a Framework for Fiscal Responsibility that was imposed by the UK Government and that was considered to be non-negotiable. Mr. Bush has admitted that as a result of that document, he has had to impose the payroll tax’.”
“It should also be noted that, in addition to the 10% payroll tax, work permit holders in Cayman must pay an annual work permit fee each year that exceeds the highest work permit paid in Bermuda for the total of 10 years.”
Premier Cox continued, “The FCO is also of the firm view that the strengthening and improving of fiscal results for the Government must not occur solely as a result of reductions to expenditure, but revenues of the Government need serious enhancement and expansion.
“Indeed one should note that the new deal that the UK repeatedly promotes is one based on strategic and operational issues and requires that Overseas Territories adhere to standards that Bermuda has already on an independent basis taken.”
Premier Cox added, “I have also stated that: ‘Provided that we remain focused on our strategies of collaboration with our business partners to enhance our enviable reputation by: strengthening our relationships with the European Union, UK and US jurisdictions; strengthening our regulations to satisfy the global regulatory agencies; and enacting business-friendly legislation, then it is unlikely that Mr. Bush’s comments will represent a serious threat to Bermuda’s existing reinsurance market in the short term’.”
As it relates to attracting additional business to our shores, Premier Cox noted, “We don’t necessarily see this latest development with the Cayman Islands alone as an opportunity to attract more business to Bermuda, as we already have our strategy to grow the financial services sector with the establishment of the Ministry of Business Development & Tourism, and the establishment of a section within that Ministry titled the Business Development Unit.
“The Business Development Unit was designed to provide an innovative body within the Government that focuses on stimulating job creation and GDP growth, improving brand equity and furthering diversification of the economy and industry sustainability, within the international business and tourism sectors of Bermuda’s economy.”
“While Cayman has been forced to consolidate their finances, Bermuda has already taken plans to stabilise our fiscal position over the medium term.
“Budget 2012 / 2013 charts a course to bring Bermuda’s finances back to balance over the medium term using its Medium Term Expenditure Framework (MTEF). This MTEF that has been adopted by the Ministry of Finance will provide for surpluses on the primary balance through to 2015 – 2016.
“This will be achieved by restraining primary current account spending to 2012 -2013 levels over the next several years and enhancing revenue through policies that generate income from government fixed assets and other revenue streams.”
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- Bob Richards: ‘Cayman Situation Is A Warning’ | Bernews.com | July 28, 2012
sounds like another crock of S&^t brewing around the campfire to me.
“This will be achieved by restraining primary current account spending to 2012 -2013 levels over the next several years and enhancing revenue through policies that generate income from government fixed assets and other revenue streams.”
BWAHAHAHAHA
WHat other revenue streams? Generating income from Govt fixed assets??? Please explain…
‘enhancing revenue’ = increasing taxes.
‘restraing spending to 2012-13 levels’ = if we don’t win the next election we will use this to try to blame the next government, and if we win the next election, we will have a dozen “reasons” why circumstances have changed forcing us to spend more.
I’m waiting to hear what Shadow Finance Minister Bob Richards has to say on this matter. After all, he has constantly told us that the Bermuda Government needs to follow the Cayman’s lead. What he didn’t tell us was that the Cayman’s budget has to be approved by the powers-that-be at #10 Downing Street.
Let’s hear more from the Shadow Minister about the red carpet treatment shown by the Caymanis.
If “Bob the Snob” doesn’t have egg on his face tonight, he should.
By the way “Bob the Snob” sounds a lot better than “E-rat” Brown or Paula “Cog” doesn’t it.
I agree Ms Furbert. What is Mr Richards gonna say now?
Bob is busy talking to the Milk Man and Micheal Faye is saying yes sir I aggree whatever you guys decided on next we will tell the public. Michael Faye you guys were fools to merge with the UBP. This is not Return of the Living Dead movie.
Anyone ever notice in the horror movies how people are getting killed in a house(UBP/OBA) and all the white sheep run back into the house and the black sheep run out.
What????
Your email contribution about this report demonstrates that you don’t have a clue about the competitive issues playing out if the offshore business arena – there are major issues in maintaining the balance of power with the onshore world while offering competitive advantage to those who want a good offshore jurisdiction – you are so blinded by politics and anti colonial fear mongering that you miss the points entirely.
Well it’ s good to see that the great Lavern has a sense of humor…. That said, the fact that Caymans budget needs approval has been public knowledge for a number of years. The reason is quite clear, the Government was sending and borrowing without the means to pay it back.. Sounds kind of familiar, huh?
Anyway, my personal thought is that the British Governemt should be doing the same in Bermuda… It may be the only way to stop the out of control spending of this Government
Name calling? Come on, how old are you LV, 10?
Paula called herself the Cog. Why would any of us disagree?
FUNNY I DIDN’T SEE YOU COMMENTING ON THE BIU’S DISGUSTING AND SELFISH CHOICE TO HOLD A MEETING BETWEEN 9:30am and 12:30am????
WHY DID YOU NOT COMMENT ON THIS PART OF bUSHS SPEECH. the Cayman Islands was now a better choice and could grow “without the malice, without the inhibitions of race, without the inhibitions of transport.”
IF YOU REALLY BELIEVE THIS DOWNWARD SPIRALING DISATROUS GOVERMNET IS A GOVERNMENT WE SHOULD BELIEVE IN AND SUPPORT WITH OUR FINANCES then wow what can I say that will convince you otherwise?? Then again you are one of the senior employees of a union that was until this year 11 years behind on presenting its balance sheets so Im not surprised that you dont understand what incompetence is!
The BIU is not holding the meeting. The Department of Public Transportation is holding the meeting. Didn’t you get the memo?
tell em Laverne….the BIU meeting is next week
Why don’t you ask a stranded senior or tourist how they feel today?
Your remarks are embarassing and meaningless!
@ LaVerne. Is this the best you can do as an ex Senator? No doubt Bermuda’s youth take their lead from your eloquent and thoughtful diatribe. Stick to looking after liquor licensing, it seems that is your forte.
By the way what on earth is this MTEF that has never been mentioned before? Budget 2012-13 doesn’t mention it. Who came up with that acronym? Where are the figures to support the current account spending (and income) over the years through to 2015-16? The whole thing sounds like a load of cogwash.
Good one .. Now 70% of foreign workers will report earnings lower than … Anybody notice how empty Hamilton is nowadays ? Maybe Keeva’s trying to free himself of all the Jamaican’s that have invaded his country .
It doesn’t appear the Premer Cox found it necessary to reassure anyone that Bermuda will not follow suit. Does that mean she is considering a similar move?
It is a human rights violation to impose a different rate of tax on foreign workers. Cox has no clue..she talks and talks and spends snd spend and borrows and borrows and talks and talks. This Mess we are in is ALL her fault. ALL her fault, pain and simple.
“….policies that generate income from government fixed assets…” means this government is beginning to sell properties owned by Government…like sub post offices, for instance.
and maybe they should sell some of the buildings? Have you seen the state of some of them – disgusting. Maybe this is why none of the ferries and lighthouses are being maintained – are they going to be sold?
Bermuda salarys are disgraceful considering the cost of living..especially for nurses and teachers..no one will stay and work if they the government is gonna take 7grand off these professions !! they’ll be better off at home with their families … no matter how good your snorkling is !! Circling the drain Bermuda !
if life or salaries were better where they come from they would not be here in the first place!
thats not true ..its that sort of arrogance that will be your downfall…people like to travel and learn ..your standard of living is not sustainable ..
It anmazes me that some people auomatically accept what the UK are telling us when their own economy is in the Toilet!
It amazes me that a government needs the UK or outside source to tell them their current economic model is unsustainable. If expenditures continually out pace revenue.. you need to address the problem.
What about the fact that any such taxation would be discriminatory??? However, this whole issue in the Cayman Islands is simply a political ploy; they know this tax on expats could not be implemented but it will justify them having to increase the tax levels on the whole population.
It’s not a ploy, I’m livng here and the Caymans did everything to attract the foreign workers. Now that the Government has sold their souls the Sand Castles are crumbling, thus the need to tax Internationl Business to get the $$$$$. In reality he has no other choice or the economy will eventually suffer.
Seriously, we really need not even discuss the matter any further as UBP/OBA have been outed yet again! They have consistantly used scaremongering tactics in an effort to secure votes. Milky lies and continues to rob us blind, Bob blows there flute and is rewarded for his misinformation (he said he would leave and relocate to Cayman if the then UBP lost in 1998, if reporters in Bermuda were serious they would research the news reels and confront him). But still the more alarming fact is we the people still,allow this opposition to function. They say they will include we the people but let us not forget that they ended UBP without consulting it’s members and that was MAJOR yet they are still blindly support by a populace of people who refuse to see how disparate the are to regain power. I can go on but why even bother as those who do not support the PLP are mentally disabled and refuse to concede UBP/OBA are not the ones. Your hopes went out the door with theBDA………
Bermuda is in need of less restriction on foreign workers when it comes to term limits and job owners who provide employment for logal Bermudians. These restrictions or long term employment personel should also be eliminated to those in management positions.
It is also time for Bermudia government to start thinking outside the box when it come to Bermuda financial future with creating jobs and with a referemda on gaming, which would create jobs and a future for Bermudians. The college could set up courses to train Bermudians to be dealers and pit bosses for the gambling casino’s. This would provide Bermudians with some type of future to further job opportunities.
Furthermore this gang violents should also be a issue to combat and put to rest. I truly believe if there where opportunities for these young men to go to school to pick up a trade or some other education programs provided by the government this would eliminate a large amount of this gang violence in Bermuda.
It is time for Bermudians to wake up and smell the coffee or tea, which ever is preferred and start thinking outside the box and leave the past behind and move on to a promising productive financial successful future!