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.