GEORGE TOWN, Cayman Islands (Reuters) – The Cayman Islands has dropped plans to impose an income tax on foreign workers nearly two weeks after proposing it in a last-ditch effort to overcome budget woes.
The Cayman Islands, which has had no income tax, is known as a tax haven for the mega-rich. The irony of imposing the tax was not lost on the financial industry workers who came out in droves to protest a measure that they said could hurt the industry that has made the beach-lined British territory one of the richest in the Caribbean.
The unprecedented proposal – called a “community enhancement fee” – would have imposed a 10 per cent tax on foreign workers earning more than US$43,200, amended from US$24,000 when it was initially announced.
Critics said the proposal would cost the territory its primary competitive edge and send international investors to other jurisdictions with lower business costs.
Following an urgent discussion with several high-profile business leaders, Cayman Islands Premier McKeeva Bush said on Monday that alternate revenues had been identified. “The tax would be taken off the table if robust, credible and sustainable revenue that did not hurt the poorest members of our islands was found. We are satisfied that many of the commitments from the private sector will meet these criteria,” he said.
