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.
Turkish parliament has already ratified the deal on construction of ‘TurkStream’ natural gas pipeline
The September rate was revised to 9.9 percent from the 10 percent first given last month.
Many analysts had expected the producers' cartel to fail to reach a deal as major players like Iran, Iraq and Saudi Arabia remained divided ahead of the meeting.
The report, which collects views of economists, business contacts and others in the 12 Federal Reserve districts in preparation for the monetary policy meeting next month, noted improved retail sales and home construction in most regions.
If the cartel does not reach a deal to cut output, prices could fall below $40 a barrel
European air travel giant Lufthansa has been battling its own pilots over pay and conditions for more than two years.
Failure to get an accord on Wednesday could send oil prices tumbling and deal a further blow to the credibility of the 56-year-old Organization of the Petroleum Exporting Countries.
Around midday, shares in Italian lenders Unicredit and Banco Popolare were down 4 percent compared with Friday's closing levels.
Officials on Friday's said the tie-up between the Hong Kong and Shenzhen markets will start on December 5.
The announcement comes as the country is gearing up for a key election next year, with the parties in Chancellor Angela Merkel's grand right-left coalition keen to woo ageing voters.
The weak inflation data -- core prices excluding fresh food fell 0.4 percent from a year ago -- come several weeks after Japan's central bank pushed back the timeline for hitting its 2.0 percent inflation target.
Roberto Azevedo says he is 'ready to talk' to US President-elect who has promised to pull US out of other trade agreements
The Ifo's headline business confidence index reached 110.4 points in November, unchanged from the October reading, and the highest level since April 2014.
More than 900 flights scheduled for Thursday cancelled as strike by pilots enters second day
Gross domestic product was expected to grow by only 1.4 percent next year -- sharply down from the prior estimate of 2.2 percent given in March.