Market Commentary and Intraday News
Cayman premier scrapping income tax on expats
286 days ago
By DAVID McFADDEN
(AP:KINGSTON, Jamaica) The Cayman Islands is scrapping a plan to impose a direct income tax on thousands of expatriates working in the British Caribbean territory that is famed as a no-tax financial center.
Premier McKeeva Bush issued a terse statement late Monday saying that his proposed tax was "off the table and will not be implemented." He did not say what alternative revenues will replace it, however.
The islands' leader said only that his administration was "satisfied that many of the commitments from the private sector" will meet his demands for revenue that would not hurt the poorest citizens of the islands.
Zero direct taxation, friendly regulations and the global money they lured has transformed the tiny island territory into the world's sixth largest financial center, with $1.6 trillion officially booked international assets.
Bush announced in July that he planned to impose a direct tax on expatriates to bail the territory out of a financial hole and to meet British government demands that the territory diversify its sources of revenue beyond the work permit fees, duties and other fees it now relies on.
He later said the income threshold would be $36,000, which would affect about 5,870 expatriates.
The abrupt proposal outraged many on the islands, who said the tax would be discriminatory and could destroy the islands' economic anchor.
On Tuesday, many expatriates were still left guessing about what the new revenue measures would include.
"The only reaction is confusion as the uncertainty continues. At least, he has removed this one tax that would have been our death sentence," said Grand Cayman real estate broker Kim Lund.
He said several real estate sales fell through after Bush announced the tax plan and some wealthy expatriates said they planned to leave Grand Cayman, where accountants, lawyers and other skilled professionals work in coastal offices looking out on clear, blue seas.
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