Caymans Backs Down on New Tax

August 8, 2012 Taxation in Cayman Islands

Caymans Backs Down on New TaxGEORGE TOWN – The government of the Cayman Islands has scrapped its controversial plan to implement an income tax in the country, only a month after the proposal was first brought up.

On August 6th the Premier of the Cayman Islands McKeeva Bush issued a statement saying that the government will now be seeking new means of raising tax revenues, after having scrapped its plan to implement an income tax on foreigners working in the country.

The premier’s statement came shortly after the conclusion of series of meetings with local business leaders regarding the tax. McKeeva Bush did not reveal all of the decisions which were reached at the meetings, but suggested that potential new sources of revenues were being considered, and that “commitments from the private sector” will help meet the government’s revenue targets.

The income tax was first proposed in July, and at the time was called a “community enhancement fee”. The tax was intended to be charged on the incomes of foreigners working in the Cayman Islands and earning in excess of KYD 36 000, and would have effected an estimated 5 870 people.

The tax drew strong criticism as soon as it was announced, with opponents claiming that the system would lead to the country losing its competitive edge and would compromise its image as a top-tier financial center.

McKeeva Bush is expected to lead a public meeting later in the week to reveal and discuss new measures which will be implemented by the government in order to raise tax revenues in the country.

Photo by Phil Gibbs