Cayman Budget Targets Budget Surpluses
The Cayman Islands’ Premier, Alden McLaughlin, recently delivered the territory’s first two-year budget, which was notable for the absence of new borrowing or revenue-raising measures.
McLaughlin said his administration will continue to pay down debt and deliver operational budget surpluses to fund capital investment plans and provide for contingency against future economic shocks. He said taking the path of “fiscal responsibility” is crucial to giving businesses the confidence to invest in the Cayman Islands.
Measures introduced in prior years to support economic growth will be maintained, including reduced import duties, lower business licensing fees, development concessions, and other measures to support small business. The Government has also committed to slashing at least 25 percent of regulations hindering small business.
McLaughlin reported on his recent visit to Brussels ahead of the EU’s planned year-end announcement to name jurisdictions it considers are not complying with global tax good governance standards. He said he explained about the reasons for the territory’s tax regime focusing on indirect taxes instead of direct taxes and outlined how the territory complies with OECD regulations, which he said places it in the same league as Germany, Canada, and the United Kingdom.
McLaughlin also explained the Cayman Islands has no double tax treaties allowing for the shifting of tax liabilities, and that businesses operating in the territory understand their obligation to pay taxes due in their home jurisdictions.
Although committing to no new revenue-raising or borrowing measures, McLaughlin did announce initiatives to upgrade infrastructure, expand job opportunities, and to alleviate poverty. He said his Government’s approach provided a platform to tackle the significant issues facing the country, while ensuring future generations would not be burdened by debt.
