Imports, permits and offshore to fund CIG
(CNS): When the new financial year starts on Wednesday 1 July, government will begin collecting over CI$628 million in coercive revenue – a record breaking amount and an estimated $5 million more than last year. The Cayman Islands Government depends very heavily on import duty, work permits and offshore sector fees for its revenues. Those three areas account for around half a billion dollars, or some 80% of the entire coercive revenue figure.
The largest single amount of money is expected to come from import duty. Government says it will collect over $97 million from customs on regular goods. In addition, almost $18 million is expected to be collected from duty on booze, a further $16.6 million on fuel duty, over $11 million from vehicle imports and more than CI7.6 million on tobacco means duties account for around $150 million of government’s coercive revenue.
Over $75 million will be collected in fees for full and temporary work-permits as well as fees for permanent resident workers. Various other fees from business staffing plans, the special economic zones and other expatriate related fees will see immigration account for around $100 million of the contribution to the public purse.
But the bulk of government revenue comes directly from the offshore sector, with banks bringing in $31 million, mutual fund administrators almost $44 million and company registrations over $103 million. Added to a number of other offshore-related fees of more than $10 million, the collection of insurance company fees of around $10 million and partnership fees of more than $35 million, the contribution from the financial services sector totals a whopping $250 million of government revenue.
Although lawmakers have just spent the last few weeks scrutinizing ministers and civil servants over their spending plans, legislators did not examine the collection of resources.
How efficient government is at physically collecting fees and the process for directing money to the treasury is an area that the Office of the Auditor General has listed on his audit action plan but no report or assessment of how well government performs when it comes to collecting cash has ever been made public.
Given the poor state of public finances over the last few years, concerns have focused on how government spends more than half a billion dollars and not on how it collects revenue. During the Finance Committee proceedings earlier this month the financial secretary revealed that government has never conducted a comprehensive review of the fees it collects to see if those fees are appropriate.
See the Annual Plan and Estimates — where government will collect its revenue from is detailed on pages 338-341.
Category: Government Finance, Politics
So much for this Government looking out for Caymanians and small businesses!!! They reduce some fees for small businesses but yet continue to peg their main revenue sources on import duties and work permit fees. What better formula for increasing the cost of living and keeping Caymanians out of work!!
PPM is a joke!!
Welcome to tax free living.
It would be cool to see the government be able to recoup revenue without doing this.
One way would be to find the missing 1 billion from government accounts and possibly a similar amount that I think, from recollection, went missing in 2008.
Just a suggestion ….
CNS do you have any figures on what tourism contributes? If so is there a breakdown of stay over tourism versus cruise tourism?
I cannot seem to find these figures anywhere in the CIG statistics.
It is interesting that, “no report or assessment of how well government performs when it comes to collecting cash has ever been made public.” And you will never see how much disappears or is “mis-directed” either!
how can an economy grow when taxes are so high…..
all i got to say is that cayman is very lucky to have dart…….
And Deloitte, Maples,EY, Walkers, KPMG, DMS, PWC, UBS……..etc….
typical cig nonsense….at the same time they ignore e&y and miller shaw reports……..
tax and spend…its the ppm way….
Ah……the current government has significantly reduced the tax burden in successive budgets + given the public service a pay increase. What do you want? MAC back? He increased the tax burden by more than $100M in a year period.
You mean they cut revenue raised from the public and instead heaped more taxes on business. “Don’t tax me, don’t tax thee, tax the man behind the tree.”
One day Cayman and its decision makers will realize that you can’t expect business to pay for everything and at the same time attempt to regulate it out of existence (via CIMA/Immigration).
Yes the private sector is the source of all individual wealth and government revenue (to be spent on education, healthcare, CS salaries, welfare etc etc) but it’s EVIL! EVIL I tells ya!
If (and this is a big ‘IF’) CIG collect it all. We’re still how many millions out of pocket on R-C?
It’s one thing to quote projected income but those figures are nothing but horse manure if the money is never actually collected.
Best bet? I’d say we’d be lucky to see CI$500million and CIG will then waste at least half of that on things we could all live without while doing nothing to tackle the real problems.
Why are you wishing failure upon the Government and by implication on all of us including yourself? That is assuming that you have a positive stake in the success of the Cayman Islands. Whether you like them or not, the current elected Government has a track record of delivering on their budgetary estimates. Of course nothing that a noisy and persistent minority of well placed naysayers cannot undo.
@6:11 Sadly, it doesn’t matter who controls the LA if the civil service continues to run riot and allow money to be spent like confetti being thrown around at a wedding. The problem with public sector financing is not the high profile big budget items but the insidious little amounts that are wasted, go uncollected or are not accounted for/lost. These build up and eat away at the revenue brought in. One thing this administration, and every one before it as far as I can remember, has still not got to grips with is the idea amongst public servants that ‘there’s always more where that came from’ when it comes to money.
The Christian bell tower super park thing springs to mind.
Any more?
Nothing to do with the current administration. They stopped this white elephant. If you let Mac back get back in charge this may well be resurrected. I wonder where the bell is? I think it may have been paid for up front.
The CIG relies, I repeat relies on Work Permits for revenue….do I need to say anymore…….
You do need to say more, because it would be useful to know if this really was a post somehow blaming your personal employment unhappiness on furreigners.
TO 12:44am, nope I am not unemployed, my remark about CIG relies on work permits shows that they CAN”T FIND A CAYMANIAN so they have to take out a work permit…..yet ezzard, tara are all screaming about how caymanians are over looked blah blah blah!!! There own country takes out work permits for foreign workers because I repeat THEY CAN”T FIND A CAYMANIAN!!!
So Ezzard, tell me again how poor Caymanians are subsidizing the offshore sector.
$250M Crikey!
Now CNS tell us how many Billions in profits are generated by these same Financial Sector companies ? The fees they pay to CIG are a fraction of the profits they take home. If it wasn’t they would have locked shop long ago.
Yeah no company should be allowed to make a profit, they should all be like Cayman Airways.
Here’s a suggestion. Go live in Cuba for a few years where all profits go back to the government and see how that works ou for yout. Enjoy the food lines and poverty. Suspect your socialist attitude will change pretty quickly.
$250m before the work permit fees and the duty on expenditure by offshore sector employees – that number is just the direct taxation through registration fees.