Cayman islands placates banks, drops plan to tax foreign workers
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.business Updated: Aug 08, 2012 23:33 IST
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.