Since the publication of a list of uncooperative tax jurisdictions by the European Commission on 17 June 2015, which named a number of CARICOM and other Caribbean countries, there has understandably been reaction in the region.
While recognising the common objective of fighting bad tax practices, the process has been seen by some of those named as an embarrassment, not least for a country such as Barbados which is currently a Vice Chair of the OECD Global Forum on Transparency and Exchange of Information for Tax Purposes.
I am aware that a number of Caribbean countries have made major efforts to comply with international standards and improve their image as tax havens. The EU is not insensitive to the plight of Caribbean countries that have had to endure one of the worst financial crises ever.
I would like to express our appreciation for the continued efforts Caribbean countries are making internationally in the area of taxation, as evidenced by their co-operation with the OECD Global Forum. As a result, most CARICOM countries are rated as “largely compliant”. This is a good international rating. In fact, it is the same rating that some of the EU States received.
Allow me to explain the process so as to allay the fears of governments and those players in the industry who might contemplate the worst as a result of the list. I also want to suggest a course of future action that could reduce the tensions created by the publication of the list.
Let me say from the outset that this was the first time such a list was prepared and is purely a compilation of what already existed at the national level of individual EU Member States. The list of countries did not emanate from a new assessment, as the jurisdictions have not been analysed by the European Commission. The European Commission recognises that Member States’ approaches to listing non-EU countries are still quite divergent and inconsistent and this is something the Commission is very keen to address.
Let me also say that the compilation of lists published by the EU Commission is not intended to compete with the work of the OECD’s Global Forum. It is essentially a tool to harmonise the different criteria that the EU Member States use, in order to achieve fairer corporate taxation across the EU, and ultimately an “OECD Plus” status. The clarity of a consolidated EU definition of a compliant/uncooperative justification would of course have immediate benefits for our partners, including Caribbean countries.
The good news is that this snapshot of EU Member States’ lists will be updated in six months to reflect any changes during that period. Therefore we will encourage listed Caribbean countries to keep in close contact with EU Member States concerned as well as the European Commission in order to correct any errors in the initial list, which do not truly reflect the situation in their country. This process of in-depth dialogue can begin as we speak. With strong cooperation, I am confident that we can improve global compliance with good tax governance standards.
Looking to the future, I believe there is an opportunity for enlarging the region’s dialogue with the EU from a position of mutual understanding, and with the recognition of the steadfast and tangible support the EU has provided to the Caribbean in taxation and many other areas. This perspective will yield great dividends on both sides for advancing fairer and more transparent corporate taxation.
Mikael Barford is the head of the EU Delegation to Barbados and the Eastern Caribbean.
Tax havens? Well, as it grows by stashing the funds out of the country, you cannot take the money with you.
They should keep their funds in the country they reside in. How much more tax could they pay? Furthermore, they deprive their country the benefit of this tax. There should be a law against it. Some of that money could be used to help the poor; to alleviate their poverty.
The money is sitting in the country of the tax haven and is being utilized by that institution. Greece is in financial trouble. Why not send some of that money to the Greek government or loan it to them? It would be an act of generosity.
“Greece is in financial trouble. Why not send some of that money to the Greek government or loan it to them? It would be an act of generosity.”
It would be throwing good money after bad. The Greeks want to work like grasshoppers but live like ants. For all their crying about how they cannot repay their debts, they’re the ones who put themselves in their predicament.
People are so sold on the idea of taxation. Wake up. It is enslavement. There should be no taxes. Taxes are comparable to the looting done by pirates. Everyone is taught that the tax money goes to support civic functions. That usually is not the case on a large scale.
Mr Barford, you refer to “the common objective of fighting bad tax practices”, but the only bad tax practices taking place are in your countries, where absurdly high rates drive your most productive residents to seek relief elsewhere. Your best solution is not to complain to us, it’s to keep taxes at home more reasonable so that financial services in our countries won’t seem so attractive by comparison. Otherwise you will remain in the embarrassing position of being the man who cannot satisfy his wife and claims her lover is to blame.
Looking beyond this list, Caribbean governments need to strengthen their tax departments to ensure more people/companies that are eligible to pay taxes in fact do so.
The problem is, those who are easily captured such as salaried employees bear an extraordinary burden while the self-employed get a free pass. They get the enjoy the same benefits as everyone else and they do not pay a cent by way of income taxes.
So what’s the objective of the list then if you’re basically saying to disregard it?