World Bulletin/News Desk
Known as a tax haven for the mega rich around the world, the Cayman Islands is proposing the unthinkable: a direct tax on expatriates to help fix the budget woes of the British territory.
The proposal - called a "community enhancement fee" and unprecedented in the island's history - is effectively a 10 percent payroll tax on all foreign workers earning income over US$24,000 in the Cayman Islands.
Blaming the previous administration and Britain's hard line on the island's budget for the current financial problems, the premier said the measure was the least onerous approach with the Cayman Islands already one month into a new fiscal year.
"This is a tremendous step away from the normal government budget, but (London) has the upper hand," Cayman Islands Premier McKeeva Bush said.
Barely two years ago, in the face of pressure from Britain to increase the territory's revenue, Bush stated "our position is, and will continue to consistently be, that we do not believe that direct taxes are good for this country."
While foreign workers make up about 50 percent of the labor force, there are plenty of loopholes that would exclude the majority of the top earners in the county as well as civil servants, leaving the bulk of the payroll tax burden to middle- class income workers in the private sector.
The 10 percent tax proposal has shaken up the business community in the Cayman Islands, with some calling for a public protest against "taxation without representation" on Monday.
The territory, a beach-lined group of islands south of Cuba, is home to most of the world's hedge funds and has long relied on the "no direct taxation" model as a cornerstone of its lucrative financial industry.
Experts say the amount of extra revenue the new payroll tax would bring in would not be enough to overcome the government's growing deficit problems and could drive international firms to move operations out of the territory to other competitive jurisdictions with lower business costs.
Two years ago, a government-appointed commission studied the direct tax and noted the international financial sector could easily move their operations to competing jurisdictions.
Representatives from the Cayman Finance Association said the government has not done enough to rein in government spending to justify a measure such as a payroll tax.
The British Virgin Islands, Bermuda, Ireland and Canada were actively enticing firms to relocate from the Cayman Islands, the report said.
Greece has already received two bailouts totalling 240 billion euros but fellow euro zone member Ireland said last week that it would have to negotiate a third programme.
The Ukraine crisis has tested the loyalties of Bulgaria, a Balkan country with historical ties to Moscow and heavily dependent on Russian energy supplies.
Syria expels three United Nations aid workers hindering aid development in the country
Russia has overcome a "psychological barrier" and is ready to deepen its economic ties with China, Deputy Prime MinisterArkady Dvorkovich said
With Chancellor Angela Merkel's right-left coalition plus the opposition Greens, it was the biggest majority for any euro zone rescue package so far in the 631-seat chamber.
The agreement commits Tanzania, Kenya, Uganda, Rwanda and Burundi to cooperate with the United States in customs issues, ease red tape at borders, reduce customs wait times and harmonize trade standards.
Sri Lankan President Maithripala Sirisena has unnerved China with his re-examination of certain projects that Chinahas invested in, including a $1.5 billion "port city" project in Colombo.
EU energy chief Maros Sefcovic invited Russian Energy Minister Alexander Novak and his Ukrainian counterpart Volodymyr Demchyshyn for talks
Gazprom and Ukrainian state energy firm Naftogaz have accused each other of not sticking to agreements on gas supplies.
The new canal, that will allow two-way traffic of larger ships, is supposed to increase revenues by 2023 to $13 billion.
A day after euro zone finance ministers agreed to a four-month extension of a financial rescue, Finance Minister Yanis Varoufakis gave a frank assessment of Greece's financial position.
The agreement is the culmination of talks that began in September after the government decided its own solutions to its fiscal crisis were failing to convince investors.
Energy union highlights bloc's attempt to seek independency from its main gas supplier - Russia.
Merkel's right-left coalition is set to prevail, despite vocal pockets of resistance on the right and left.
Republicans passed the bill to increase pressure on Obama to approve the pipeline, a move the president said would bypass a State Department process that will determine whether the project is in the U.S. national interest.
Turkish PM Davutoglu expresses Turkey's readiness to help in supplying energy to Central Europe.