Range of fees to plug budget
(CNS): The financial services sector will bear the brunt of the fee increases that government will impose to replace the controversial expat tax. However, ordinary businesses will also face increases in work permit fees, starting at 5% on permits between $1,000 and $3,000 and 10% on those in the next category, increasing gradually to 20% on the most expensive management permits. Premier Mckeeva Bush said Wednesday that he hoped to raise over $44.3 million from a combination of fees with $7.8 million coming from the permit increases. Bush announced a list of fee increases, from tourism room taxes to licence fees for boats over 30 feet, to plug the budget but most of the revenue will come from the finance industry.
Speaking at a public meeting on Wednesday evening at the Mary Miller Hall for more than two hours, the premier waited until the last moment to reveal the package of new revenue measures he hopes will satisfy the UK's demand for a "sustainable and credible" budget for the 2012/13 fiscal year.
These include an increase in tourism room taxes from 10% to 13%, a departure tax increase of $10, a rise in stamp duty on some insurance policies, as well as stamp duty increase on real estate, new traffic fees, licences for boats over 30 feet that will increase incrementally on the size of vessels, fees on tobacco products and ten cents on beer bottles and cans. He said the details of the measures would all be revealed when the budget was approved by the overseas territories minister and presented to the Legislative Assembly.
The majority of the new revenue in the revised budget will come from increases on the finance industry, which Bush described as a national asset. There will be director fees, fees on master-funds, which he said would raise over $2.3 million, and an increase in the fees of limited partnerships, which should bring in around $9 million.
Together the fees will mean that the so-called 'community enhancement fee', which was a proposed tax on the earnings of work permit holders, would be scrapped. The u-turn on the contentious proposal came as a result of various groups approaching government with alternative suggestions and members of the business community making a commitment to take on more fees.
Bush said he was against taxation and that fee would have been a last resort. He said he had no intention of introducing taxes on profits, incomes, property, death or inheritance and that he had fought hard not to introduce direct taxation.
It was, he said, his intention to present the revised budget to the UK shortly and he hoped to have a favourable response next week, which would allow him to present the budget on Monday 20 August.
Although cutting things fine, this would allow the legislators ten days to debate the budget, scrutinize the spending plans and cuts in public spending and pass the appropriations bill before the government's stop-gap budget passed in June expires on 31 August .
During Wednesday night's public meeting Bush did not allow a question and answer session and there was no debate or discussion. He received some applause at times but the presentation, which was a rehash of his speech at the West Bay meeting last week, was made before a smaller and more subdued audience. Although he railed against the opposition and the press, the premier reigned in his criticisms of the governor and other public officials.
He did, however, accuse CNS and The Caymanian Compass of creating an international media feeding frenzy with their 'hysterical headlines'. Bush seemed to think that it was not the proposals to introduce a form of direct taxation to the jurisdiction that had attracted the international attention but rather the “irresponsibility” of the local media.
Although the premier was as scathing as ever about CNS, which he described in an email earlier this week as a "wutless scandal sheet", he also took aim Wednesday night at the owner of the Compass. Being the only print media, the owner was abusing his position and being irresponsible, Bush said, adding that he would be writing to the paper in response to the "licks” the local newspaper had given him this week.
Bush denied the accusations made against him of vote buying and said what he did was because he had a passion to do good. “I am trying to help people at a time when businesses are not concerned and don't understand that there are people who can't pay their electrical bill,” he said, adding that these people end up on the doorstep of every politician, including the opposition.
Given the difficult times, Bush appealed to employers to take on Caymanians and told them not to refuse people because they were over qualified. He pointed to the local unemployment problem and asked how there could be 20,000 work permits and an unemployment rate of over 8% among Caymanians.
Bush said he was introducing an additional fee that employers would pay on certain categories of work permits that were for jobs that could be taken by Caymanians and hoped this would encourage people to take on local painters, among other similar categories of workers.
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