EDITORIAL

Where will the $25 million come from?

Wednesday,  February 15, 2006

With $25 million needed to be raised to meet the expenses of building new schools, roads as well as paying for the necessary resources for the Royal Cayman Islands Police Service, (RCIPS), the Government says it is looking closely at a variety of revenue sources where the money could come from.

Every government the world over battles with the need to raise cash to meet society’s demands and at the same time the demand from people that the community shouldn’t have to pay for their demands.

Call it tax, fees or licences the name is irrelevant, governments need to raise revenue and inevitably they will always upset some of the people in the process.

The current Government says it has engaged a private sector consultation group to assist in the decision over where the funds will come from for the Cayman Islands. 

This too has already run in to some criticism, with people suggesting the profile of those consulted is not particularly diverse and is weighed heavily towards those with an interest in the Financial sector – and who are therefore unlikely to suggest their own industry as a sensible source for a large percentage of the missing money.

The Government is currently focusing on what it has termed the revenue register as the place where the cash should come from, which consists of a variety of different fees paid for various services.

These cover a wide range of fees from those paid to register in this country as a Veterinarian to the cost of making an appeal against a permanent residency decision.

The Government said that many of these types of fees have not gone up, in some cases, for almost three decades and so suggest there is room for an increase.

It certainly makes sense to look at those things which have not been raised for a long time, but to raise $25 million the Government also needs to ensure that whichever fee or license it chooses to increase, it is one that is transacted extremely frequently or by lots of people over the year. 

For example raising the fee to register as a dentist in this country even by as much as $100 dollars a time, is hardly likely to make an impact on the $25 million, considering the number of dentists likely to register in a given year.

A realistic revenue earner has to take the form of a license, fee or tax, which is paid by everyone or like company registration fees, which is happening extremely frequently.

Moreover the Government could also consider new options. A tobacco, alcohol or fuel tax, could bring in substantial sums, even for just a small increase to the consumer.

Moreover all these areas have a duel purpose – not only do they raise revenue, increasing the costs of alcohol, tobacco and gas also results in at least a few people cutting down their use of all three which can only be a good thing for society as a whole.

Other options which the Government could consider, include a closer look at the offshore sector.

Introducing more fees within the financial services sector, not least a money transfer tax, or transaction fees, would certainly go down well among voters, as it would mean ordinary people are left completely in the clear. Every day billions of dollars pass through accounts in this country and offer the administration an easy target for raising revenue.

Even a very small percentage placed on the international transfers made every day through the offshore industry could easily make the $25 million needed and keep residents happy.

Whatever revenue source the Government settles on it needs to raise the $25 million for what most would agree are exceptionally important causes.

And unlike most governments around the world, this administration is in the enviable position of having a number of options, which it could choose, without touching a penny in the pockets of its electorate.

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