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There is mountinganger by the private sector leaders
and the public at large, creating an unprecedented ...
Furore Over Fees/Taxes
A numberof private sector organisations are coming out in opposition tothe recently presented 2002 Budget in which government has announcedsome fee increases to cover an expected shortfall between revenueand expenditure.
Saying that projections put total revenuenext year behind total expenditure by just over $50 million, FinancialSecretary Hon. George McCarthy announced a hike on charges spanningeverything from Bank and Trust Licenses to garbage fees. Now,the Council of Associations has decried the increases and is holdinga public meeting Tuesday, 18 December to discuss the issue.
Describing the fees as taxes, the organisationsaid: "The Council of Associations, which represents allindustry sectors in the private sector, believes the Budget taxproposals may cause widespread layoffs and reductions in socialprogrammes being sponsored by the private sector at a time whenthe local economy is already suffering from a world-wide recession.
"The Council of Associations met todiscuss the potential impact of the 2002 Government Budget proposaland expressed its 'grave concern' over the impact on the localeconomy as a result of the largest tax package in the historyof the country," the council said in a statement on 13 December,just one week after the budget presentation in the LegislativeAssembly.
The Council of Associations also made clearits unhappiness with the level of government spending: "TheCouncil also expressed its dismay that despite repeated urgingsover the last year from various business sectors, including theCouncil of Associations, Government has made no substantive progressin curtailing its expenditure".
In addition to the scheduled public meeting,the organization called for urgent talks with government to discussits concerns.
The Cayman Islands Real Estate Brokers Association(CIREBA) issued a statement acknowledging that the sluggish economyand pointed to a need for further public belt-tightening.
"With regard to the budget deficit(which is where all the pressure to raise fees comes from) of course the budget must balance, but not at the expense of theeconomy as a whole," it said.
CIREBA added, "Our situation callsfor less government which will mean less cost to all of us."
Government set about to raise exactly $54,852,654from 14 areas of revenue collection led by Bank and Trust Licenseswhich are expected to produce some $18.9 million dollars. Thesecond highest is in the area of Health Service Fees realising$9.4 million, followed by Mutual Funds Administrators at $7.4million. Court Fees (Notary Public) at $51,275 are the lowestrevenue earner in these fee increases.
The total Work Permit Fees are expectedto amount to $5.6 million and in this area an additional fee,ranging from $10,000 to $40,000, is to be laid on non-Caymanianpartners/directors in professional firms.
CIREBA noted as positive a recent governmentreduction in stamp duty and spoke of private sector efforts tostimulate the economy, then commented:
"And now government in its wisdom proposesto load us down with more fees which will further weaken industrieswhich are already staggering. CIREBA and the rest of the privatesector cannot provide discounts and absorb greater costs of doingbusiness. And the economy cannot be healthy unless the privatesector is healthy."
It is understood that a meeting was heldbetween members of government and some private sector representativesMonday, 17 December with no resolution in sight concerning theproposed fee hikes.
One member was heard indicating that a possible moratorium onlocal loans will be instituted because of the uncertainty of acool economy further impacted by these new taxes.
Meanwhile, the Council of Associations hasscaled back a planned protest, fearing that several staff members'work permits will be jeopardized by a formal demonstration ofdisapproval.