New Revenues for the Cayman Islands

August 9, 2012 Taxation in Cayman Islands

Cayman Islands Unveils New Revenue SourcesGEORGE TOWN – The government of the Cayman Islands has come forward with a slew of new proposals to raise tax revenues.

In a public meeting held in George Town on August 8th the Premier of the Cayman Islands McKeeva Bush outlined a series of tax changes which could raise the country’s tax revenues by up to KYD 53 million per year. The new tax measures are intended to be a replacement for the proposed “community enhancement fee”, which would have imposed a tax on the incomes of foreign workers working on the island.

Amongst the changes announced by the Premier is an increase to the fees collected for work permits for foreigners holding high salary jobs in the Cayman Islands. The government expects that the new measure will raise approximately KYD 7.6 million in extra tax revenues per year.

The largest portion of the new government revenues will be gained from an increase to the annual registration fees for Exempted Limited Partnerships, which is expected to raise a further KYD 9 million for the national budget. The fees for the registration of Master Hedge Funds will also be increased, resulting in additional revenues of approximately KYD 2.3 million.

Another KYD 2.8 million will be realized by raising the Tourist Accommodation Tax from the current rate of 10 percent to 13 percent. Departure taxes will also be hiked by KYD 10 per person, raising an extra KYD 3.9 million per annum.

The government has also proposed that stamp duties should be imposed on some insurance policies, leading to potential tax revenues of KYD 1.2 million.

All of the proposed changes must first be approved by the Foreign and Commonwealth Office of the UK before being implemented, and the Office is expected to release comments on the proposals later next week.

Photo by Joe Dsilva