The UK has given the Cayman Islands permission to borrow $279 million to help deal with its financial crisis.
Leader of Government Business McKeeva Bush broke the news at a United Democratic Party meeting last night. He was speaking after a week of talks with the UK Foreign and Commonwealth Office.
The UK has given immediate approval to $50 million of borrowing. The remainder is conditional on the Cayman Islands making cuts in financial expenditure over the next two financial years. An independent study of the impact of direct taxes on the islands’ economy will also be carried out.
Mr Bush outlined significant cuts in government expenditure including new staff hire, purchases of furniture and equipment, and non-essential travel. He stated there were no immediate plans to introduce income or property taxes. Additional revenues will be raised by increasing customs duties by two percent, passport fees, tobacco duties, and introduction of new duties on luxury and other goods.
The legalisation of gambling was also mentioned as a potential source of new revenue. Mr Bush stated that if this was considered necessary, the matter would be decided in a referendum.