Friday, February 28, 2020

Barbados ranked among 15 worst tax havens

Barbados Today:-Minister of International Business Donville Inniss has angrily dismissed as “wicked”, “mischievous” and “grossly misleading”, the categorization of Barbados by the UK-based aid and development charity Oxfam as one of the world’s 15 worst tax havens.

In a no-holds-barred reaction to the listing, Inniss told Barbados TODAY the charity, which focuses on the alleviation of global poverty, did not have the credibility or authority to determine whether or not Barbados was a tax haven.

He also suggested that organizations such as Oxfam were picking on Barbados because they had concluded that the country could not fight back.

“These organizations do these wicked things and get away with them because small economies like Barbados do not have the financial wherewithal to go after them,” he said.

Insisting that Barbados was not a tax haven, the minister noted that the 35-member intergovernmental economic grouping, the Organization for Economic Cooperation and Development (OECD) had recently given this island a passing grade.

Inniss also likened organizations like Oxfam to the mafia seeking to discredit sovereign states such as Barbados, and wondered if other groups that did not deal with such issues would feel compelled to do the same.

“The next thing you know the Salvation Army is going to say we are a tax haven, the Red Cross are going to say we are a tax haven, the gays and lesbians society are going to say we are a tax haven. Where will it stop?” the minister asked.

He said Barbados had established a rate of taxation and other incentives, including treaties with other sovereign states that strengthened this country’s ability to attract reputable companies from other jurisdictions.

Inniss accused Oxfam of wanting Barbados to “come with a begging bowl” to it, rather than praising this country for lifting its people out of poverty.

“I say that they are hypocrites . . . and I am prepared to dispatch the appropriate correspondence to the hierarchy of Oxfam on behalf of Barbados, condemning their utterances and warning them about the irreparable damage that their reckless comments could cost a jurisdiction like Barbados,” he stressed.

In a policy paper entitled, Tax Battles – The Dangerous Global Race to the Bottom on Corporate Tax released yesterday, Oxfam ranked Barbados as the 13th worst tax haven in the world. Of the 15 jurisdictions listed, the British territory of Bermuda is listed as the worst offender, followed by the Cayman Islands, another British Overseas Territory. Curacao (8), the Bahamas (11) and the British Virgin Islands (15) are the other Caribbean jurisdictions on the list.

“These countries earned their place on Oxfam’s ‘world’s worst’ list because they facilitate the most extreme forms of corporate tax avoidance, driving the race to the bottom in corporate taxation,” the UK charity contended.

It explained that Oxfam researchers assessed countries against a set of criteria that measured the extent to which countries used three types of harmful tax policies: corporate tax rates, the tax incentives offered, and lack of cooperation with international efforts against tax avoidance.

Oxfam argued that while collecting taxes was one of the key means by which governments were able to address poverty and inequality, big businesses were “dodging tax on an industrial scale”, depriving governments of the funds needed to address poverty and invest in health care, education and jobs.

It charged that the 15 countries named were “extreme examples of a destructive race to the bottom on corporate tax” which has seen governments across the globe slash corporate tax bills in an attempt to attract business.

“Corporate tax havens are causing the loss of huge amounts of valuable tax revenue and their use is becoming standard business practice for many companies,” it charged.

“When governments reduce the tax burden for large corporations, they tend towards two options: to cut back on the essential spending needed to reduce inequality and poverty; or to make up the shortfall by levying higher taxes, such as value-added tax (VAT) . . . which fall disproportionately on poor people,” it added.

The policy paper slammed both the European Union and the G20 for committing to produce a blacklist of tax havens, but failing to use “objective and comprehensive criteria” that result in some of the worst offenders not appearing on the list.

“The EU’s decision to only assess and list countries outside of the EU ensures that no European country will feature on their blacklist, despite Oxfam’s analysis indicating that the Netherlands, Luxembourg, Ireland and Cyprus are among the world’s worst corporate tax havens. Many EU leaders are also willing to exclude countries such as Switzerland from the blacklist merely because it is engaging with the EU on issues relating to exchange of financial information,” it said.

It also lashed out at the OECD for failing to give developing countries a seat at the table during talks with the G20 on a multilateral process to try to tackle corporate tax avoidance, known as the Base Erosion and Profit Shifting (BEPS) initiative, while “corporate tax havens such as Switzerland, Netherlands and Luxembourg had a seat” at the negotiations.

The remaining countries on the list are Singapore, Hong Kong, Cyprus, Jersey and Mauritius.


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