The move comes after several high-profile business leaders lobbied with the government to withdraw the proposal, which would have overcome the tax haven’s budget shortfall.
The Cayman Islands Premier McKeeva Bush said that the tax plan was off the table and will not be implemented, adding that alternate sources of revenues had already been identified.
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"The tax would be taken off the table if robust, credible and sustainable revenue that did not hurt the poorest members of our islands was found. We are satisfied that many of the commitments from the private sector will meet these criteria," he said.
It was in late July 2012 that the Premier had suggested implementing a community enhancement fee that charged a 10% on expats earning over a certain amount each year.
Further, despite the fact that the proposed tax contained plenty of loopholes that would have excluded the majority of the top earners in the territory, both expats and locals have complained that that the measure would likely destroy the islands’ main economic anchor in the financial sector.
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