Finance ministry to review CIG fees
Financial Secretary Kenneth Jefferson (L) and Finance Minister Marco Archer in Finance Committee
(CNS): Minister of Finance Marco Archer has stated that government will be doing a review of the fees it charges for services, especially in the offshore sector, after it was revealed that fees are not routinely being reviewed. Although government has committed not to increase fees or introduce new taxes during this administration, Financial Secretary Kenneth Jefferson admitted some fees may not be covering the costs of providing the related service in order to balance the books. Marco Archer said the ministry would examine fees to strike a better balance between competitive rates and covering costs.
During the recent Finance Committee proceedings, Ezzard Miller asked what formula, if any, CIG uses to establish the rate of fees for services, saying he believed the public purse was subsidizing the offshore sector. The independent member for North Side queried whether government was actually ensuring that fees it collects for various public services cover the cost of providing the service.
Jefferson admitted that there was no general formula that examines whether the money collected covers the cost or if services were subsidized. He said that while it is “desirable to cover costs”, government must also ensure that the fees charged, especially in the financial services, are competitive when compared to other jurisdictions.
“To be totally frank, it is factual and it is the case that fees in government are generally not reviewed as frequently as they should be and there is not a central body or office that reviews,” he said, adding that it was up to staff in each ministry to raise the matter with their minister if they feel fees have been dragging.
Miller said he was aware that CIG had followed the historical model of simply increasing fees when it was noted that the rate had remained the same for a certain number of years, but it was time for government to move beyond that and have a definitive costing of the fees it charges that can be reviewed annually and assessed against the backdrop of inflation rates.
He asked for a commitment from government for a more structured, cost-based formula so it could demonstrate that the fees were justified because of the need to cover the real costs.
“We have to stop taxing the poor people to regulate the financial industry,” Miller said.
Noting that government had to take into consideration that it operated in a “globally competitive environment”, Archer nevertheless told the independent member that his ministry would review revenue measures and see where fees could be adjusted to meet costs.
Category: Government Finance, Politics
Please look at the ridiculous and usually arbitrary work permit fee schedule while you are at it!
The CIG needs to put a higher priority towards invoicing and collecting receivables. Head need to roll. There are many departments with invoicing YEARS behind. This is why we STILL only have select departments submitting full accounts.
I think MLA Miller is way off base. This is not surprising as I don’t believe the Hon MLA Miller really knows how the economy works. He’s constantly electioneering and pandering to his voters with messages targeted at such a low level that it is appalling indeed. Everyone knows the offshore sector fees are supporting our bloated government in a very big way. The other joke here is that most government fees, as should be expected, are taxes and no service at all is received in return. What does a law firm or accounting company get in return for those 6 figure T&B licenses? Nothing ! Well, a piece of paper saying you are “licensed”.
1. you are likely right re Mr Miller
2. you are certainly wrong re the other joke but I will make you a deal. How about you have the accounting and law firms pay a 20% income tax instead.
That will be a corporation tax
Yes 9.25 because they are Caymanian by then and worked harder than the other kids did…not tough to figure out…
Well 11.54, I will be gentle, as you probably need a lie down after your effort at writing this morning. If funds are raised by CIG by charging fees to offshore clients (ie non-residents) and not by by directly taxing the population of Cayman then that would be indirect taxation in one of its forms. I will let that sink in for a week or so before explaining the others.
Anyone working in the offshore sector will know that Ezzard must be tripping if he thinks the public purse is subsidizing the offshore sector. It is a known FACT that the offshore sector is actually the main source of funds into the public purse.
The only ones draining the public purse are the government officials and staff working with CIMA and other regulatory bodies who despite once being efficient, now do an absolutely appalling job, and take months to make decisions that used to take weeks, milking the offshore clients of literally thousands in ongoing fees whilst they drag their feet, fail to answer the phones, respond to voice mail messages or emails asking what the problem is, make inconsistent decisions and become an increasing risk to the CIG let alone a drain on the public purse.
If that is a fact then can you tell me why on the PR culture/history test it states that the main source of funds for the CIG is indirect taxation? Sorry to diverge…
11:54, What do you think “fees” are? What do you think duty is on all goods imported? That’s right, indirect taxation.
How long will it be before we find a bunch of people to really do what’s right for Cayman without fear of losing votes? How long will it take for the fellow voters to educate themselves and to realize that we need leaders who will need to take tough decisions to lead the country forward? We will all suffer a bit through the times but we will come on top stronger in the end.
Hard policy on:
Unemployment
Education
Govt processes and financial reporting
Civil service performance and accountability
Social assistance
Corruption
Crime
Environment
Energy
Debt repayment
Provisioning for health And pension etc
Govt spending and dept restructuring
Law Enforcement
Etc…….
We need people who make decisions without consideration to future vote repercussions.
So you want a government basically?
The better answer is to reduce the cost of the provision of services but cutting the bloated civil service numbers. But Government is too cowardly to do that.
We know the cost!!! Start making the civil service personally pay for their own health and pension coverage. As far as I see, I give $100K in fees a year and get Jack SH>>>T for it.
The worst thing is i’m a small pea in the pod paying this amount!!!
GET RID OF THE DAMM DONKEYS!!!!!!!!!!!!!!!!!!
There is no politician in the history of the world who saw a tax or fee that couldn’t be increased. Never reduced or revoked. Always increased and expanded. It’s in the DNA and exhibits openly once elected.
I think you missed the fact that the PPM Govt just reduced the tax on diesel by a very substantial amount.
In case you haven’t heard, most of us use gas!
And you are using diesel energy to send that very message!
And your point is what? The prices for gas and diesel will return to record highs before year end, guaranteed, then they will reduce the price again but not less than the previous increase, so you still lose! Do you ever pay attention? Its summer, guess what, CUC bills go up, so does gas and diesel.
The financial service industry is moving out. Your leaders are just too stupid to know this. So lets just speed this up and get it over with
The offshore sector funds government. If fees go up anymore everything will move to the BVI. When I used to work at CIMA I used to think the offshore sector should pay more. Now that I work in the sector I can promise you if the fees go up anymore we won’t have a sector because cost is what clients care about and they have no loyalty to anything but their bottom line. They will go elsewhere and we will have a real problem then. We have it good let’s not ruin it by unnecessary fee hikes. Government should more than do with its 3/4 billion dollar budget. Let’s not drive anymore industries away like we did with fund administration.
4.16 it is really sad that you actually think that will work. You cannot force employers to employ people beyond a certain extent. They will just move the jobs elsewhere. It happened and is ongoing in Bermuda, and it happened here to a certain degree a year or so ago, until CIG woke up. The answer is not in forcing employment (thats what the CS is mostly, a social service backstop), but in ensuring that all Caymanians get the right training in all respects to be prepared to enter and compete in a vibrant financial service sector, and not just to enter, but to march up the ladder. Its not happening, which is why a lot of Caymanians are finding it tough.
Whilst they are at it they should investigate the total cost of medical treatment, airfares, hotels etc for all civil servants and their employees to find out how much the private sector is subsidising government for these expenses.
8,000 civil servants for a working population of around 25,000. highest in any non communist country, supported by workpermits and offshore sector fees. But the offshore secotr to Ezzard is being subsidised by the poor? how? do you really think the customs on goods bought by the “poor” is covering all the civil servants etc?
Maybe we can see how much we are subsidising the poor when we do these calculations as well, cue Essard coughing up a fur ball.
Dumb and Dumber…subsidizing the Financial Services Sector?? Great ex-pat, offshore bashing and trashing headline. Financial service sector contributes almost 60% of CIG revenues, so how is that being subsidized? Work permit fee horrendous on top of doing business fees. However, once again, rather than facing the real issue of tackling spending, tackling crime (cost to the public purse), tackling education issues that could solve the whole mess once and for all, they just want to increase fees thinking the offshore service sector clients (who dont live here) will cough up and say no more, once again forgetting that we are in daily and increased competitlon against Bermuda, Bahams, Barbados, Turks and Caicos. There comes a point (and its not far away) where we will price ourselves out of the financial services sector and CIG can kiss 60% (odd) of its revenue good bye. Always what they percieve as taking the line of least resistance rather than actually doing the right thing.
Cost to school Cayman child at public school-KYD10,000 pa? Result?
Stop taxing the poor to regulate the financial industry? What proportion of government revenue comes from poor people versus the financial industry, do you think, Mr Miller?
Start by raising work permit fees so employers think twice about hiring non-Caymanians. It beats having Govt turn around and support Caymanians through social services. It’s sad that law makers can pass laws for things like the film industry but can’t focus on the real problems. If they think a large picture in a newspaper makes Caymanians forget their plight then these people as sadly mistaken! PPM done!
Please try to get this. An unemployable Caymanian is unemployable. Simple as that. The answer to unemployment of Caymanians lies in training them to be EMPLOYABLE. If this needs to start by firing your imported landscaper and paying your kids pocket money for mowing the lawn then so be it. If he then starts to mow other lawns in the neighborhood then he is learning about business. Maybe he will eventually hire his Caymanian buddies to help his growing business and eventually his children will say “this is hard work, I’m going to stick at school so I can get a better future than my dad”. That’s the way out of this dilemma.
An unemployable Caymanian is unemployable?, try telling that to the Civil Service.
The fees are not the issue, it’s the cost Ezzard. They need to look at how to make services more effective to charge us less.
We are spending $730,000,000 annually for 50,000 people living in 30 sq miles of developed land. That is just an immense amount of money!
There are a few facts you have to get straight. The budget which Finance Committee just approved IS NOT a $730 million budget. Finance Committee IN FACT approved a $540 million budget. The additional $180 million is expenditure by Statutory Authorities and Government owned companies which is approved by boards managing those entities.
So 720 million then, then, that’s a lot better, only $13,100 per person, as half of that are expats who pay to have their children educated and get no government payouts, that it $26,000 per person in government payouts.
Dependents Fee for Expatriate Child of work permit holder – CI$250.00
Government subsidy to private school in respect of that child – CI$550.00.
Subsidy (per child) CI$300.
Why?
Try reading the discussion on equal access to education earlier this month and you will see that the real questions are why the work permit holders children are denied access to government schools.
Of course, perhaps you meant why wasn’t the subsidy the same as the cost to government to provide a place to a Caymanian child, but I rather suspect you are going in a slightly different direction (one that breaches the Bill of Rights) 😉
If expats want free school for their kids then they always have the option of going back home.
Indeed 6.30, go ahead with your award winning plan to get us out. Cunning to say the least and brilliant in its conception! Once you look at the maths then we can see your genius! Budget of CIG usd 730 m. 60% of that comes directly from FS companies. Plus roughly another 20% in the import duties that expats pay when shopping here. So let’s say, roughly we have 730m supporting 30,000 Caymanians. We leave you will then have roughly $150m supporting 30,000 Caymanians. I am so stunned by your brilliance that words fail me. Almost nothing left to steal from! Gets ridiculous corruption sorted in one foul swoop!
Please don’t get caught up in believing that the voice of a few on this site is the voice of the majority. I am a 7th generation Caymanian, and I know that today the world is a global village.
If we are to survive we will have to be competitive. Unfortunately there are those in EVERY society who find it easier to blame others for their own shortcomings and failures.
Precisely. How quickly so many conveniently forget that they agreed to come here ON CONDITION THAT THEIR CHILDREN WOULD BE PRIVATELY EDUCATED.
and get ripped off trying to get anything done by the low level corruption that is ignored as part of the culture.
One cannot agree to waive the basic and guaranteed human rights of another person, ie the children.
Then I guess the Immigration Permission you received with that condition is void. Sorry.
So long as we school your kids for free at the British taxpayers expense if they come here to the UK (which we/they do) yes?
I am a Caymanian educated in the UK and my parents had to pay the same private school fees as any other foreign national. Caymanians are not entitled to free education in the UK.
Unless you lie and say you live with a relative in the UK…….
That’s not what’s happening though is it? The expats kids are going to the local private schools, and then by the time they graduate, their parents have residency or status and then guess what? Because they have a decent education they take your job. Doh!
I don’t think I’d want my kid to go to public schools anyway – the education standards are absolutely atrocious
That’s not the point – original poster was implying it was unfair/unreasonable for CIG to subsidise expat childrens’ education, whilst completely ignoring both the requirement to offer equality under the Cayman Bill of Rights and the fact that the expatriate probably contributes more to the general Cayman exchequer, including the education of Caymanian children, then they receive in terms of private education subsidy.
The Bill of Rights does not matter; the discrimination against non-Caymanian resident children by denial of access to free schooling is a breach of the ECHR. one day the CIG will be sued for a lot of private school fees.
Erm, one is a fee paid by the expat/employer for a child of any age, school age or not, the other is a subsidy paid to the schools for each child that goes there, expat or local. How is this relevant to anything? You could look at it from another angle, the school gets $550 per child, the expat kids pay $250 of that, locals pay nothing. Just depends on how you want to view the world.