GEORGE TOWN, Cayman Islands — The Cayman Islands is planning to hike hotel and departure taxes. Increasing fees for work permits is also planned, in order to help bail the British Caribbean territory out of financial hole.
Premier McKeeva Bush said late Wednesday that those measures and others should generate $52.5 million in 10 months.
Associated Press reports that he 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 percent to 13 percent. 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.
According to AP, 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 Aug. 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.