Government begins drive to collect $650M
(CNS) Members of the public and the business community will all need to dig deep over the remaining ten months of this financial year as the government seeks to raise a further 20% in revenue from the local economy. Despite the continued downturn and economic difficulties faced by many businesses, particularly small enterprises and local retailers, the government is hoping to squeeze the most cash from the community in the history of the Cayman Islands in order to cover the cost of government and to return a significant surplus. The government is in the process of amending laws and regulations to allow it to collect some $90 million more in fees.
Although the country’s financial services sector will bear the greatest burden, new fees for boats, extra duty on tobacco and alcohol, as well as work permit, stamp duty and planning fee increases and a rise in tourism taxes will impact a wider cross-section of the community.
According to the annual plan and estimates, despite the economic difficulties facing the local economy, government hopes to boost revenue collection from the offshore industry by some $60 million, while it hopes to raise more than $13 million extra in duties compared to last year and close to $10 million more in work permit fees. The tourism sector will also be coughing up another $5 million in accommodation and departure taxes.
In total government will collect over $590 million in coercive revenue -- duties, taxes and fees -- and will collect the remaining $60 million from entity revenue.
With government unable to borrow and with no supplementary appropriations allowed as a result of the agreement with the FCO and its conditional budget approval, government will be heavily dependent on producing the revenue measures which will produce the projected $82 million surplus.
For the first time government has based its earning projects on a 75% rate of compliance rather than a 100% compliance expectation, as it had in the past. This means that government anticipated that it will be able to collect three quarters of the fees it has mandated, placing it in a better position than in previous years.
However, the government has based its assumptions on a predicted growth during this financial year of some 2.3% in GDP and a fall in the unemployment rate of three points to 5.9% against the backdrop of a world economy predicted to grow by less than 2%.
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