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(CNS Business): The business community will be digging deep to pay for new work permits as of today following the increases to most permit fees. The new rates have now been implemented after government changed the regulations to reflect the fee hikes in this year’s budget. For the second time in two years the premier has turned to work permits to boost the public coffers and cover the mounting cost of operating the local government. Although it was expected that the financial services sector would bear the greatest burden in fee increases, most fees have gone up, impacting retail, building and the tourism industries among others at a time when many businesses can ill afford the extra costs.
The new fees are effective from Thursday 13 September and see a range of increases from 5% on permits costing between $1,000 and $3,000 to 20% on some of the more senior positions in the finance sector. In some cases, however, work permits for those at the top of the legal profession have increased by more than 30%. The only categories to have escaped the hikes at a time when businesses throughout the private sector are feeling the pinch are those costing less than $1000.
Government hopes to generate $650 million from the economy before the end of the current financial year, a 20% increase (roughly $90 million) on the money it collected in fees, duties and taxes last year. The premier said he anticipated collecting close to $8 million of that new money from the increases in work permit fees.
The private sector, and in particular the financial services sector, is facing another year of high fees and taxes with the imposition of a number of new fees and duties in this budget. However, hikes in previous years, including 25 cents on fuel duty as well as numerous other business related fees, have taken their toll on the local economy.
Despite the difficulties and the latest round of fee increases, government is optimistic that the local economy will grow during the coming months. According to forecasts in the budget documents, government expects to see growth of 2.3% by the end of the 2012/13 fiscal year, dependent on the private sector investment projects and the “modest but stable growth of demand for tourism and financial services,” it said in the Annual Plan and Estimates.
The government remains hopeful that construction will contribute to the country’s economic recovery, including the controversial cruise ship project in George Town with the Beijing based firm CHEC, the anticipated development of Cayman Enterprise City, the Shetty Hospital, the ForCayman Alliance project and the development of Owen Roberts Airport, all of which it believes will begin in this financial year. The UDP administration also said it was hopeful that changes to the legal and regulatory regime for the offshore sector will enhance that pillar of the economy and attract more business to Cayman.
While government continues to be optimistic about growth in the local economy, it predicts a fall in the overall unemployment level. The budget forecasts call for a fall this financial year in unemployment from 6.2% in 2011/12 to 5.9% in the 2012/13 financial year.
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