The 10 per cent tax on expatriates' salaries will be applied to workers earning $36,000 and more a year, Premier McKeeva Bush announced Wednesday.
Mr. Bush said at a public meeting in West Bay that, contrary to his earlier announcement that the payroll tax would be imposed on expats earning above $20,000 a year, instead work permit holders earning more than $36,000 would be subject to the proposed tax, which he said was being introduced as a "last resort".
No separate income tax department would be set up to collect the tax. That remit would fall to the Immigration Department, which already has a database of work permit holders and details on their salaries, Mr. Bush said.
Government minister Rolston Anglin said the 10 per cent would apply to a "wide definition" of salaries and would likely include bonuses and other compensation.
The payroll tax will not apply to non-Caymanian permanent residents or to non-Caymanian government employees, Premier Bush clarified.
Also, Mr. Bush said those being charged the tax or community enhancement fee, as he has termed it, would not be given a "discount" on the fee. In other words, there would be no $35,000 subtraction from an expatriate's income before taxes were levied. Someone making $35,000 a year would pay no tax, but someone making $36,000 a year would pay the full ten per cent levy on their entire salary.
The premier also revealed the planned introduction of a 5 per cent additional fee, based on salaries, that would be levied on employers of expat staff in certain categories of employment.
Mr. Bush said that measure would be introduced as an incentive to employers to hire more Caymanian staff.
No demonstration was mounted at the meeting, but expatriate and Caymanian opponents to the tax made statements and posed questions to Mr. Bush about the proposed taxation measures, while a number of Caymanians voiced their support of the tax.
Check back for more on this story.