Cayman islands placates banks, drops plan to tax foreign workers | business | Hindustan Times
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Cayman islands placates banks, drops plan to tax foreign workers

business Updated: Aug 08, 2012 23:33 IST
Reuters
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The Cayman Islands has dropped plans to impose an income tax on foreign workers nearly two weeks after proposing it in a last-ditch effort to overcome budget woes.

The Cayman Islands, which has had no income tax, is known as a tax haven for the mega-rich.

The irony of imposing the tax was not lost on the financial industry workers who came out in droves to protest a measure that they said could hurt the industry that has made the beach-lined British territory one of the richest in the Caribbean.

The unprecedented proposal - called a "community enhancement fee" - would have levied a 10% tax on foreign workers earning more than $43,200, amended from $24,000 earlier.

Critics said the proposal would cost the territory its primary competitive edge.

Following an urgent discussion with several high-profile business leaders, Cayman Islands Premier McKeeva Bush said on Monday that alternate revenues had been identified.

The financial services sector accounts for about 55% of the Cayman islands economy, according to an Oxford Economics report.

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