GEORGE TOWN, Cayman Islands (AP) — The Cayman Islands is proposing to increase fees for work permits while boosting hotel and departure taxes to help bail the British Caribbean territory out of a budget deficit.
Premier McKeeva Bush said late Wednesday that those measures and others should generate $52.5 million in 10 months.
The announcement came two days after Bush scrapped a plan to impose a direct income tax on expatriates working in the famed no-tax financial center. It had outraged many on the islands, where financial services and tourism are the pillars of the economy.
Under the new plan, the territory's departure tax would rise to $37 from $25, while the hotel room tax would jump from 10 per cent to 13 per cent. Fees would rise on work permits for financial controllers, accountants, real estate brokers and other upper-tier employees, Bush said, but the cost of permits for lower-paid job categories, such as janitorial and security staff, would not rise.
Bush stressed he has "no intention to levy any form of taxation on corporate earnings, capital gains or profits generated by businesses."
The islands' budgets must be approved by the British Foreign and Commonwealth Office, and Bush said the Foreign Office is expected to comment on the tax proposals next week.
Bush, who is also the finance minister, said he hopes to deliver a budget by August 20.
Zero direct taxation, friendly regulations and the global money they lured have transformed the tiny British territory into the world's sixth largest financial center, with $1.6 trillion officially booked international assets.