No Income Tax in Cayman

1188POSTS

13 years ago

Cayman is well known in international financial circles as a top-notch offshore tax-haven. Most of the world's hedge funds are domiciled here, and most of the world's major international trading companies have subsidiaries or affiliates here. There is no local tax on their Cayman-generated profits.

More to the point for expats reading this Forum, there is no tax on wages or salaries. None. Zip, nought, nada. There are deductions for compulsory private pension-fund contributions (5% of salaries up to $60,000) and for compulsory private medical insurance, but that's it. Employers are required to match the 5% pension contributions; the funds are independently managed and accounted for. Each expat's accumulated investment (plus any profits) is paid to him when he leaves the Islands.

Our government gets a third of its spending-money from Import Duty on all goods brought into Cayman. This Duty is reflected in the high retail price of everything. The tax-haven clients pay most of the rest, with some help from our tourists. As for what government spends all its revenue on - don't get me started! A huge, huge amount is wasted. I have posted some severely critical comments on this topic on my personal blog. If you're thinking of living here, you should read them; but if not, never mind.

See also

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John C. ViP

1813POSTS

12 years ago

Gordon Barlow wrote:
Our government gets a third of its spending-money from Import Duty on all goods brought into Cayman. This Duty is reflected in the high retail price of everything. The tax-haven clients pay most of the rest, with some help from our tourists. As for what government spends all its revenue on - don't get me started! A huge, huge amount is wasted. I have posted some severely critical comments on this topic on my personal blog. If you're thinking of living here, you should read them; but if not, never mind.

Hello Gordon,

In St. Lucia, the Government is the sole importer of sugar & flour, which of course translates into revenue in commissions and also in regulated price control, which I think it聮s good.
Small quantities of flour are now imported privately in SLU, but not to compete with Government.

Do you agree or disagree with this type of G聮vmt generating a revenue?

In Barbados they have a widespread work-share plan in place whereby Tom goes to work on Mondays till Wednesdays and Harry goes on Thursdays till Saturdays. Next week they change. This way everybody gets a few dollars and also gives everybody free time to work for 2-3 days as self-employed persons.
Every island finds ways to make life easy for its people, and after living for 22+ in the tropics I realize how difficult the available options and decisions on new directions is for officials in small communities like island nations.

I believe in Internet power and in the next generation of islanders (those who are now 10- 12 of age) who will find plenty of work to do online instead of chasing after old-style jobs (the way jobs are now).
Finding work in the next decade will be a function of (1) public demand switching from subsistence thinking into innovative thinking for ways of using the computer and (2) employers changing habits to accommodate such new and modified demand.
We are now in 2013 in the Stone Age period of the computer era and this has to evolve the same way the Stone Age evolved.

I also believe in self-employment through cyber-trading securities (stocks, Forex, futures) privately as the only means to achieve spiritual & financial freedom (even if not riches! 聟 ) and the only way to really restore human dignity.
More than the citizens of big countries, islanders should be the first in line for these changes to occur and these changes should be the first & last prayer at Sunday Mass, not what it is now.

These are three unrelated ideas for us, islanders.

I聮d like to hear from you.

Gordon Barlow ViP

1188POSTS

12 years ago

John. First: I believe government (politicians and bureaucrats) should not compete with private enterprise, and should stay out of commercial operations that private-sector businesses can do. Hey, I'm a former Manager and sometime Director of our local Chamber of Commerce; what else am I going to say?

Private businesses make money; governments do NOT make money. "That government is best that governs least." "Crime wouldn't pay if the government ran it." And many more like that.

Second, the Barbados workshare plan. I'm OK with it if it's voluntary. I don't think politicians and bureaucrats should legislate when everybody can and can't work, beyond a bare minimum of interference. How does the Barbados Civil Service operate with all the switching around - or doesn't that Law apply to Civil Servants? I'll bet it doesn't apply in the Legislature, either.

You're probably right about the Internet jobs - but somebody's still got to raise live chickens.

Gordon Barlow ViP

1188POSTS

11 years ago

Here's a quick update on Cayman and its government. It's still touch-and-go whether our local politicians will impose a tax on incomes. Our colonial masters in London are refusing to authorise any new excessive-borrowings, so our representatives must either reduce Public Expenditure or raise taxes. The best way of reducing Public Expenditure is to privatise some state enterprises - but that means hauling the bureaucrats and political cronies into line, and that's a hard decision for the people up top. What to do?

Just last week I added a piece about privatisation to my blogsite, choosing our state turtle-farm as an example of what ought to be privatised but probably won't. I'm wouldn't dream of reproducing the whole essay here, but will offer this extract:

This Turtle Farm is several things: a commercial farm, an endangered-species refuge, a tourist attraction with bells and whistles, and a zoo with a snack shop. It occupies a block of prime sea-front real-estate, which is the only thing that any private investor is likely to be interested in. All the operations could and would be closed down in a month, if private-sector standards were applied聽 but will almost certainly take a year or more using civil-service standards. Full privatization of all unnecessary government operations will take the best part of a generation.

NomadLawyer Serial expat

693POSTS

11 years ago

Thanks for the update, Gordon. Almost without exception (e.g. the former Soviet satellite states), whenever there's a choice to either (1) cut spending, or (2) raise taxes, the government will go with #2.