Any countries impose a direct income tax only on foreign workers?

General Questions
#1

I live in the Cayman Islands where the tax structure is built on indirect taxation and fees. The government is funded off 22% import duties on almost everything, work visa fees, stamp duty on property transfers, and a whole list of fees for everything having to do with the financial sector. But no sals tax, VAT, or other direct taxation is imposed.

Still the economy slowed and the premier proposed a “Community Enhancement Fee” of 10% of payroll if the worker’s wage is above a certain threshold* only to be paid by foreign workers in the private sector to close the budget gap. He insists that such taxes are in place in other countries but I cannot find an example.

Anyone know of a place that only imposes such an income tax on expatriate workers and exempts citizens?
*10% of the entire wages if the wage exceeds the limit. Initial proposal was limit of CI$20,000 (US$25,000). A worker with annual wage of $19,999 pays $0, a worker with $20,001 pays $2000. Subsequent revisions of the proposal raised the threshold to CI$36,000 (US$45,000).

** Eventually the proposal was withdrawn and other revenue measures were proposed.

#2

I don’t know of any examples where only foreign workers are taxed, but many countries do have provisions that increase taxes in some way on foreign workers. For example, foreign workers (non-resident aliens) in the US are not eligible for several deductions or credits and therefore pay more tax than they would as a US citizen/resident.

I wouldn’t consider this to justify the premier’s statement as you describe it, but in the world of politics, even a little half-truth seems to be enough nowadays. It’s probably more true than claims like “Obama supports the Muslim Brotherhood” or “Romney kills people with cancer.”

#3

Apparently this was proposed (but not enacted) in Saudi Arabia earlier this year. Something like 90% of the workforce in Saudi Arabia is foreign, so this would have made a big chunk of dough for the government. From what I can tell, though, there were concerns that people wouldn’t want to come to Saudi Arabia if they were taxed for the privilege.

#4

Someone I know was an expat employee of the Saudi national airlines ~1985-1992.

When he first signed on there were no income taxes for anyone. After he had
been there a few years the King issued a decree that all foreigners would have
to pay income tax starting such-and such date.

The day after the King’s decree there was a wildcat strike by close to 100% of the
expat working population, who, as you say, make up 90% of the workforce.
Everything in the kingdom ground to an complete halt, and the King had to issue
an immediate decree rescinding the prospective tax.

Looks like some things never change.

#5

When I lived near Montana many moons ago, one candidate for governor basically campaigned on a platform of getting non-Montanians to pay much of the state taxes. Tax on hotels, sales tax only for non residents, income tax for non-residents, tolls on roads for non MT license plate cars, increased fees for hunting/fishing license etc etc.

He was elected and I kept hearing on the radio about how all his proposals he tried to enact were illegal or unconstitutional. I think the hunting/fishing an hotel taxes stuck though.

#6

But that will depend on what country they’re from, since they may get similar or better deductibles based on a bilateral treaty. When I worked in the US, the straight deductible I got for being a Spaniard beat anything I would have gotten on the same income if I was American.