Raise taxes or no bailout, UK tells Cayman Islands | Business | guardian.co.uk .
The Foreign Office has forced the Cayman Islands' government to investigate the possibility of introducing direct taxes on businesses and residents based there.
An independent assessment of diversifying the Caribbean tax haven's revenue base is the main condition stipulated by the Foreign Office for allowing the Caymans to borrow from banks CI$50m (£38m) immediately together with a further CI$229m loan. The Cayman government has also agreed to make significant cuts to its public expenditure programme.
The deal, which is close to resolution, should avert the embarrassment of the island authorities being unable to pay their staff. It also means the Cayman government will be able to unveil a budget as soon as tomorrow after it was forced to postpone it last week.
This is welcome: the UK is using its influence appropriately to require reform that is good for Cayman and coincidentallty the world at large.
Thanks for reading this post.
You can share this post on social media of your choice by clicking these icons:
You can subscribe to this blog's daily email here.
And if you would like to support this blog you can, here:
A nice backtrack, they have gone from “must introduce direct taxes to get approval”, to an independent look at their introduction.
Commom sense ruled in the end, the CIG have been saying they have to reduce expenditure since they got in a couple of months ago, so no change there.
And the new budget appears to bring in a small surplus by the end of next year without direct taxes. It’s amazing what can be done when a government encourages it’s people to work hard for a living, instead of supporting laziness with handouts supplied by the hard working productive citizens of society.
Creg
Let me quite clear about this: Cayman lives on two things. First stolen funds. Please don’t deny it: it is true of all secrecy jurisdictions or they would not need the massive walls of secrecy that surround them. Secondly they abuse the poor of the world – some of whom die as a result as Christian Aid have shown. This is also theft.
Your comments are not only untrue, they are profoundly unethical and show your indifference to the real consequence of secrecy jurisdictions: that the poor get poorer and the ruich get richer, and neither deservedly show.
If you wonder why I treat people like you with contempt, that is why.
Richard
But Richard. You treat everyone who disagrees with you with contempt.
Now you know why
I don’t like abuse
What’s wrong with that?
Amazing the rise the truth incurs on the closed minded
Unethical? wanting a budget surplus is unethical? I guess thats why the Latin for left is sinister, if that’s what you letfies believe.
Some of us don’t really like debt, I can see why you think that deserves contempt
Now before you get off that high horse, you are in the UK, how many people of this world have died due to the British and US and their policies? The striping of colonies in the past, allowing your bug multi nations of the present to carry on. Allowing your drug companies to get away with not helping the millions every year that die pf malaria and other curable deseases.
Then there are the philantropists like Bono, who you hate because he choses to give his money directly to charities where it will do the greatest good rather than get lost in the inefficiences of your government and do nothing.
Then there is the church and the numbers died and living in misery due to the ban on contraception causing overpopulation leading to a vicious cycle of desease and starvation
Try to improve your self before others, that why I find people like you contemptable, always pushing your own sins on others.
Gentlemen, gentlemen: this is all starting to get rather personal.
The solution to the issue of the Cayman Islands’ budget is clear — the islands should declare independence in a constitutional referendum.
This would enable its government to structure its tax system as it wishes, and to borrow whatever banks are willing to lend it, without the interference of the UK. It would also mean that if it miscalculates and fails to recognise an ongoing structural deficit where one exists, the British taxpayer will not be required to fund a bailout plan.
UDI is not viable
Back to the drawing board Iliam
If we are talking of ethics allow me pose this question. How ethical is it for a government to take more than half of an individual’s earnings in tax? This is what the current Labour Goverment regards as sound econoic policy but surely the vast majority of hard working individuals find this repugnant and a complete abuse of governmental power.
It seems pretty obvious that both UK and US goverments are not opposed to low tax regimes on ethical grounds (what is morally sound about high taxation?)but are in fact acutely embarrassed by their own fiscal promiscuity and the need to claw back billions through punative tax measures.
Lastly the FCO’s treatment of Cayman is reminiscent of 19th Century gunboat diplomacy. I wonder why HMG doesn’t feel it can be so agressive and high minded about the tax high jinx taking place in China and India? Scared? I think so.
No, we’re not discussing UDI. The agreed mechanism exists between the UK and all its Crown Dependencies and Overseas Territories that they may declare independence with the consent of the United Kingdom government on winning a majority vote in a referendum. Bermuda, for instance, held such a referendum in 1995, but the population overwhelmingly voted against independence, leading to the resignation of the then-Premier Sir John Swan, who had deeply committed himself to the cause. It would only be UDI if a territory’s government made such a declaration without first holding and winning a referendum on the issue.
Actaully Cayman has a lot more to lose than tghe UK if they went independent.
For a start the FS industry here would go poof, and everything with it
Cayman’s only natural resource are it’s few beaches and it could all be under water in the next century if the worst GW predictions occur.
Unfortunately Cayman does not have a Snaefell or North and South Barrule. (getting homesick)
Highest point now is Mount Trashmore (the dump) at I believe 50 feet
Jack
Isn’t it moral that those with greatest capacity to pay do so at highest rate?
Doesn’t this accord with marginal utility theory?
And isn’t it moral to comply with legally created laws?
What else is there to moralise about?
Richard
@Richard Murphy
Richard
I didn’t say that we in the UK shouldn’t pay tax. However even you must see the injustice of a citizen giving upwards of 60% of his earnings to a government suffering from fiscal incontinence.
Gordon Brown has long held up his countryman Adam Smith as the bedrock of his financial philosopy yet even a superficial knowledge of Smith’s work reveals that excessive taxation and “big government” is a situation to be avoided at all costs.
Also if we all excepted that it was moral to comply with legally created (and totally misguided) laws then there would never be regime change and tyrants would rule the earth.
In short, excessive taxation to bolster inefficient government is immoral and should be resisted by all free thinking individuals.
Jack
Jack
Let’s be realistic here
a) No one pays 60%. We do, at present, have a system where the average tax rate on the top 10% in the population is the second lowest by decile at about 34%.
b) If those earning over £150k pay a marginal rate of 50% on that part of their income this will still mean they pay less than 50% by a klong way overall.
So let’s stick to facts
Second, I note you run a company. Max tax rate on any income you shelter 28%.
Hardly excessive is it?
And re morality – our democracy is not perfect – but there is nothing better except PR. So are you saying you don’t like democracy because you don’t like what people vote for? Where’s the morality in that?
Please don’t conflate totalitarianism with democracy. Even I’ll accept the Tories will have a mandate if they win next year
So shall we come down and discuss things here on planet earth – not the make believe place you seem to be inhabiting?
Richard
PS Who does your media company represent? Are you here in a professional capacity?