Lawyer queries Cayman’s stamp duty collection

| 07/03/2016 | 23 Comments

Cayman News Service(CNS): Questions have been asked as to how the Cayman Islands Government collects stamp duty on unregistered leases and whether some people, including civil servants, are getting away with not paying while others are being squeezed by ruthless landlords in the absence of protections and rights for local renters. Peter Polack has submitted a request to senior civil servants for information on the collection of stamp duty, how much government has managed to collect and what action it is taking on poor payers. He is also asking if overseas government workers, including senior police officers, are all fulfilling their stamp duty obligations.

Polack has opted to file his queries as a direct question to both Kenneth Jefferson, chief officer in the finance ministry, and Alan Jones, chief officer in the planning ministry, maintaining that they are under an obligation to address such queries under the Public Service Management Law. Like many users of the FOI law, Polack is frustrated with that route as an option for addressing public interest queries, describing the process as being akin to getting “stuck in molasses”, and said he was trying to find out through other means how government deals with this important revenue stream.

“In a time of government austerity and no progress for tenant rights under the Registered Land Law, it would be useful if the chief officers of the relevant CIG portfolios advise the public of their progress or lack thereof in collection of stamp duty for unregistered leases,” he said.

However, Polack’s enquiries have so far failed to produce any information and he has been told by Jones that parts of his request may be impossible for government to answer. For example, he said it was impossible for the Lands and Survey or any department to confirm that stamp duty had been paid on leases taken out by specific groups of people, since there is just no way of knowing all of the contractual leases that exist. He said some agreements are also verbal, even though there is still a legal requirement on the part of the lessee to pay stamp duty and register the lease.

However, Jones said that in practice there is no way of knowing what leases exist at any one point in time, making it clear that government is struggling to enforce the fee structure. Polack said Jones could find out if civil servants were in compliance by contacting the relevant HR officers as he asked the chief officer to explain the steps he had taken as a chief officer to try and remedy the problems regarding the collection of revenue on stamp duty on leases.

Under the latest Stamp Duty Law, all rental leases are subject to the tax. The rate varies depending on the length of the lease but in many cases landlords include the fee in the rent and pay the tax on behalf of their tenants.

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Comments (23)

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  1. Anonymous says:

    Isn’t the concept of evading taxes awful? Ironic isn’t it?

  2. Anonymous says:

    Of course, if the stamp duty is not paid then a landlord cannot sue the tenant for unpaid rent . . .

    • Anonymous says:

      Incorrect. The case can go to court. The lack of stamping will not preclude legal action. The lease agreement will state who is responsible for the stamp duty, and if nothing in the lease, the law will dictate. The person responsible will just need to pay the stamp duty during the court case.

      • Anonymous says:

        No, you cannot rely on a document that has not been stamped. So the person cannot wait for the outcome before deciding whether or not to pay.

    • Anonymous says:

      Where can we get the law and what is the process? There is no simple information out there on this. Also how will Govt make sure that all the little shacks and little places being rented will pay their share?

      • Anonymous says:

        Voters, and indeed anyone who simply does not wish to pay, are exempt. They also do not have to pay their hospital bills, Trade & Business Licensing fees, and garbage fees. If they have a gasboy card they do not have to pay for gas. Isn’t it great.

  3. Anonymous says:

    10.16 you say “Repeal the tax and put in something easier to enforce”. No amount of dumbing down will produce enforcement as long as votes are affected by the actions of politicians. Its not the law that is the problem but our lack of integrity in our elected members.

    • Anonymous says:

      and of our Civil Servants who fail or refuse to uphold our laws at the insistence of politicians.

  4. whatever says:

    If this was school I would fail government and all its various institutions for ignoring most laws. Then I would fail all voters for continuing to vote in the same TYPE of politicians over and over again.

  5. Anonymous says:

    Repeal the tax and put in something easier to enforce.

  6. Anonymous says:

    5.02 Council tax pays for schools, hospitals, roads etc.which are rather important services in any civilized society. If you don’t like it then go somewhere else.

    • Anonymous says:

      Cayman has other means to pay for these services. Why impose ‘rental tax’ when there is no incentive to live in such an expensive jurisdiction? The inward investment will decrease. Why purchase rental properties when you have an additional factor of tax to consider? Just call it what it is. It is property tax in disguise.

  7. Anonymous says:

    I don’t think many even know this law exists. Honestly why was rental included this go around. This is no better than council tax. My family moved here for a reason. The reasons are decreasing.

    • Anonymous says:

      Stamp Duty on leases has been around for donkeys years but its never been enforced. If it were all that would happen in all likelihood is that rents (and house prices) would reduce by the cost of duty, because that’s what a market does when a tax is imposed on it…..

      • Anonymous says:

        Stamp duty on leases were only for registered lease agreements which is for 2 years or more. Now there is no time restriction of the lease to incur stamp duty.

  8. Anonymous says:

    Peter…good job! keep them on their toes and promote accountability…

  9. Turtle says:

    Peter, do you know how many more staff government would have to hire to do this, a whole new dept? Oh there solves our unemployment problem, revenue collected could pay for their salaries instead of my duty fees been given to them by social services.

  10. Anonymous says:

    Peter. This is Cayman. We ignore most of our laws.

    • Anonymous says:

      And then write more laws to enforce those being ignored. And then write even more to enforce those written to enforce those being ignored which are also being ignored. And then write………….!

      • Anonymous says:

        It is a form of corruption. We pass laws and do not enforce them because it would upset voters, then we enforce them only against expats because they cannot vote. It is disgusting. There should be arrests. It is yet another clear indication that we seem incapable of operating a modern country/economy.

        • Anonymous says:

          This whole issue got emphasized in a different article today. It is clear that voters who do not want to do not have to pay their hospital bills. More than 120 million dollars of our money has been written off. We should be much much angrier with our government than we are. They are trustees of our money, our economy, and our future, and they are giving it away without even determining if debtors have the ability to pay!

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