Mac calls off tax meeting
(CNS): Monday night's meeting at which the premier had planned to talk to the public about the expat income tax was call off at the last minute in the face of a peaceful protest. Citing the disquiet in the community about the issue, McKeeva Bush cancelled the meeting, suggesting the protestors were being influenced by those that “meant the country no good”. The meeting has now been moved to his own constituency in West Bay on Wednesday evening, where Bush will be hoping that he can round up enough of his own supporters to undermine the planned rally by the protest group which has emerged in a matter of days via social media.
The Facebook group Caymanians and Ex-pats United Against Taxation was created by Nick Pitman in the wake of the premier’s announcement last week that he intended to tax the earnings of work-permit holders earning more than $20,000 per year by 10%. When CNS posted the story on its website, it got a record 800 comments as shockwaves over the suggestion ricocheted across the islands.
The growth in internet use in Cayman in recent times was further illustrated when Pitman’s page had reached some 9,000 members by the weekend. With foreign and local workers coming together, this has sent a clear and unequivocal message to the premier that this form of income tax is a step too far.
The group now has more than 10,200 members, and in the face of the planned protest that could have attracted thousands the premier cancelled the Monday evening meeting at the eleventh hour. In a short statement released from his office Bush said that after consultation with his Cabinet colleagues he had decided to postpone the meeting, which was meant to inform the public about this controversial move.
“There appears to be an ill-temper abroad that suggests we would not get the calm and measured discussion that these issues require,” he said. “There is too much influence being exercised on people’s minds by those who mean the country no good. Hopefully the disquiet they have generated will lessen enough that in a couple of days we can have a proper public reception and discussion of what we have to say."
The meeting will now take place on 1 August at the Sir John A. Cumber school hall at 7:30pm on Bush’s home turf.
However, members of the social media group intend to move their planned peaceful protest to the district in an effort to dissuade the premier from introducing the tax, which would be a fundamental shift for Cayman.
Although the tax is currently only targeted at foreign workers, it is clear most people recognise that it is merely step one and that once introduced direct taxation could quickly spread to all, including Caymanians, which would not only hurt the community directly in its pocket but could undermine the entire financial services sector.
Sources tell CNS that the premier hopes to raise some $50 milllion through this tax to plug the deficit in his government’s budget. However, many believe his estimates are far wide of the mark and that there are numerous other options which could bring in more revenue without resorting to direct taxation, such as a legal lottery or taking 2 cents from the US-Cayman dollar exchange.
Although Bush has pointed the finger at the UK pressurising him to introduce direct taxation, the governor’s office has sated that the UK has not yet approved this budget. In addition, London sources also state that the FCO’s economic advisor to Cayman has asked for further reductions in operating expenses and has not demanded payroll tax or any other tax but a form of sustainable revenue.
Although Bush persistently blames the opposition for the position the country is now in, the reason why the UK still needs to approve the CIG budget is because, despite promises over the last three years to reduce borrowing and operating expenses, the premier has continued to borrow in each and every budget and increased spending on public services.
Bush had said over and over again this year that the UK will not permit the Cayman government to increase its borrowing levels. Nevertheless, he submitted a budget to them for approval in June which not only included an overdraft facility of $27 million but around $50 million more in long term borrowing as well.
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