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The Miller commission says no to direct taxes in Cayman FCO backed report calls for major and immediate cuts in public sector expenditure Press Release Grand Cayman, March 15, 2010: Direct taxation has been ruled out for The Cayman Islands according to the findings of an independent economic commission published today. In the fourth quarter of 2009, The British Foreign and Commonwealth Office requested that the Cayman Islands Government appoint an independent external commission to undertake a detailed economic assessment of the options for and the impact of changes in revenue sources, as well as changes in spending and public sector entitlements that would ensure the long term fiscal and economic health of the Cayman Islands. The Miller Commission’s conclusion has focused on the need to cut public sector spending and emphasised that the introduction of direct taxation to the islands is not a viable option. Amongst the report’s “Major Conclusions” were the following points:
These findings echo the findings of senior taxation academic Richard Teather in his recent report on the probable effects of direct taxation in the Cayman Islands published last week. Teather’s report, commissioned by Cayman Finance, also unequivocally ruled out the introduction of direct taxation to the Cayman Islands, stressing that it would exacerbate the current economic problems in Cayman rather than alleviate them. The Teather Report sees the solution to current deficits as a substantial reduction in government expenditure and highlights the fact that government spending in the Cayman Islands is “totally out of line with its peers, having far higher levels of public spending than any other comparable jurisdiction.” The comments in the Teather Report are confirmed by the Miller Commission. Miller states in two central conclusions, “Personnel costs are crippling the Cayman Government's ability to restore its fiscal balance and by any reasonable standard are excessive and unsustainable.” And that “The Cayman economy and its Government's revenue are highly dependent on the financial services and tourism industries, and additional levies on either would likely be counterproductive.” Commenting on the Miller Commission, Cayman Finance Chairman, Anthony Travers, OBE said: “This is a very comprehensive and academic work and the FCO were clearly right to request it. As a result, Premier Bush now has a clear road map backed by independent research and backed by the the FCO about what is the right policy for Cayman and as to the the specific remedial revisions to the public sector remuneration and benifits packages. “These problems have clearly developed over a great number of years, but it falls to Premier Bush to bring the Cayman Islands into line now with real world economics. “The Miller Commission is very helpful in specifially targetting the areas where current practices must be revised and changes made. The Report makes clear that there is no sustainable basis on which the Cayman islands public sector can continue to be isolated from real world economic belt tightening.” The chairman of the Miller Commission is James Miller, a former member of President Ronald Reagan’s cabinet and who enjoys an international reputation for integrity and technical competence in all fiscal matters. As Chairman of the US federal Trade Commission Mr Miller was instrumental in reforming the outdated methods of that agency. Mr Miller is joined on the commission by Mr David Shaw. Mr Shaw served as a Member of Parliament in the UK for ten years. He was the UK parliament representative to the European parliament Committee meetings on single market and financial services regulation. Mr Shaw is Chairman of the Sabrelance group, a UK regulated corporate financial advisory firm. The final member of the commission is The Hon Kenneth Jefferson, the Financial Secretary of The Cayman Islands. Mr Jefferson previously worked in public accounting in both Cayman and London for PriceWaterhouseCoopers and Ernst & Young. For further information contact: ### |
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