CAYMAN ISLANDS-ECONOMY- CMC- The government in this British Overseas territory has announced plans to increase some taxes or fees over the 2024-25 budget period; this would lead to an increase in duty on electric cars, stamp duty in high-end locations, work permit applications and some General Registry fees.
This was revealed on Friday by Premier and Finance Minister Juliana O’Connor-Connolly as she delivered the Budget Address, during which she stated that an increase in fees over two years would be non-inflationary and would not impact “the little man.” Still, the revenue would play a vital role in funding public services.
With around CI$128 million of unused but proposed borrowing carried over from this year, if the government does spend all of these proposed borrowings, it will add about $278 million to its existing debt over this next two-year budget cycle, leaving it with a debt balance at the end of 2025 of about CI$500 million. The premier said this would deliver a surplus by the core (or central) government of around CI$43 million in 2024 and CI$53.2 million in 2025.
Cayman’s most significant budget to date forecasts that the core government will collect CI$1.09 billion in revenue in 2024 with expenditures of CI$1.05 billion. In 2025, it is predicting revenue of CI$1.3 billion, with spending expected to reach CI$1.08 billion.
While the government will be spending hundreds of millions on various capital projects, from parks to prisons, in her new role as finance minister, O’Connor-Connolly revealed that personnel costs for the government will exceed half a billion dollars next year and a whopping CI$522 million in 2025, as it recruits more mental health staff, border control personnel, and regulators for the offshore sector, as well as funding increases in teachers’ pay.
O’Connor-Connolly outlined some of the capital expenditure, but more details of how the government will spend its record revenue and borrowing will be explained during the budget debate next week.
She said that in addition to filling the holes in the debts of operating revenue for government-owned companies such as Cayman Airways and the turtle farm, two new high schools, roads, airport redevelopment, a new prison, the Scranton Park, land acquisition as well as money for affordable housing would be funded.
Despite the size of the budget and the new debt, the premier said that the government would still comply easily with all of the public management and finance law requirements in both years.
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