For a few weeks, it seemed like the ideal way to raise government revenue: tax the people who can’t vote. But, amidst protest from citizens and foreigners alike, the Cayman Islands government decided to scratch the proposal that many had dubbed an “expat tax.”

The territory’s premier, McKeeva Bush, announced a proposal in July to implement a “community enhancement fee,” a 10 percent payroll tax, on work permit holders in the territory who earn more than $36,000 per year. The plan was quickly met with vocal opposition from expatriates and Caymanian citizens, many of whom feared that the measure, which some groups called “discriminatory,” would hurt Cayman’s reputation as an international finance centre.

“The discriminatory nature of the tax has stirred up so much uncertainty for people who moved here thinking they knew what they were getting into,” Paul Fordham, a six-year CI resident originally from the United Kingdom, said, according to the Washington Post.

While Forbes magazine called the tax measure “fiscal suicide,” Mr. Bush defended his proposal at a public meeting on Aug. 1.

“This is not an us and them story, no matter how many screaming headlines call this an expat tax,” he said.


See the Aug. 16, 2012 edition for full coverage.