Recession hits hard Cayman Islands holiday industry
The Cayman Islands holiday market is looking very gloomy as pressure is put on the Cayman government to raise taxes in order to help them push themselves out of the financial disaster the country is in.
Pressure is being put on the Cayman government to raise new taxes in an attempt to bail themselves out of the financial mess the country is in.
Despite being a popular destination for Cayman Islands holidays, the recession has badly affected the region's holiday industry and now Britain has urged the Cayman government to take action to develop a financial plan and reconsider tax enforcements.
The Cayman Islands, situated 150 miles south of Cuba, are British Overseas Territory but despite the country having their own government, they still have to get permission from Britain to borrow amounts over their legal debt limit.
With bank loans amounting to $465 million, the Cayman government were unable to pay all of their bills last month and unless a new plan is put in place, matters could get even worse. Known as a popular place for tourists taking Cayman Island holidays, the region is also one of the world's largest tax havens. But with no income tax or capital gains tax, the islands rely on indirect taxes from customs duties, stamp duties, and land lease and rent.
Foreign Office Minister Chris Bryant, told McKeeva Bush, the leader of the Cayman government in a recent letter:
"I fear you will have no choice but to consider new taxes - perhaps payroll and property taxes such as those in the British Virgin Islands."
One of the main reasons that the Cayman Islands are in such financial despair is due to the affects the global recession has had on tourism. Visitor numbers of people taking Cayman Island holidays dropped by 12 per cent in the first quarter of 2009, and with tourism making up three quarters of the Island's economy, the outcome has been particularly dire. Fewer tourists have been taking Caribbean holidays to destinations all over the region due to the recession and it has been one of the worst affected areas of the world.
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