by Shawn Cumberbatch
Barbados’ reputation as a international business destination of choice has taken a beating in the Canadian Parliament.
Now, following a recent Standing Committee on Finance investigation on tax evasion and the use of tax havens, that country’s government has received recommendations advising it to clamp down on Canadians investing money here and in other low tax domiciles.
But Government is fighting back, with Minister of International Business, Donville Inniss, promising this evening: “There will be no retreat — no surrender!”
He also informed Barbados TODAY that in response to the latest attack the Freundel Stuart Administration wrote its Canadian counterpart and the two were expected to have discussions on the matter shortly.
“I am aware of the persistent and often times unwarranted attacks on Barbados as a domicile of choice for global entrepreneurs. We will continue to communicate with all relevant parties on these matters as we seek to ensure that we do not facilitate tax evasion but rather play our role in helping legitimate investors expand their global reach,” Inniss said.
“The Government of Barbados has already dispatched correspondence to the Canadian Government on relevant matters and we will intensify our discussions over the next weeks.
“We have a suite of treaties and structures that are compliant with serious international rules and we will continue to build our international business sector around such,” he added.
This latest salvo against Barbados followed testimony from witnesses, including the Quebec Association for the Taxation of Financial Transactions for the Aid of Citizens, that the investment Barbados is attracting from Canada is largely due to a effort by citizens to avoid paying their full amount of taxes at home.
Unfortunately for Barbados, the May 2013 parliamentary committee report has made a series of recommendations, including a call for the federal government to provide the Minister of National Revenue “with more authority to obtain business identification information, such as in relation to a business’ operating name and legal name, ownership, business activities and contact details”.
This would include “the ability of the Canada Revenue Agency to withhold certain refunds claimed by a business until the requested information is provided”.
Additionally, the group of parliamentarians also advised the government to establish a special “whistleblower programme”, allowing the CRA to “pay rewards to individuals who provide it with information about major international tax non- compliance that leads to the collection of outstanding tax”.
The recommendations were prompted in part by testimony from a number of experts, who shone a negative spotlight on Barbados. A number of them were critical of the double taxation treaty Canadian signed with Barbados. Among them was Quebec Association for the Taxation of Financial Transactions for the Aid of Citizens President, Claude Vaillancourt.
“ATTAC-Quebec has often criticised the double taxation agreement between Canada and Barbados, which has resulted in direct investments by Canada in Barbados to the tune of $53.3 billion,” he said.
“This agreement favours price transfers, among other things. It enables companies to register their profits in Barbados and bring that money back into the country without paying tax to the Canadian government.
University of Oxford Professor Paul Collier said Canadian investment in Barbados did not result in jobs here, but was a means “to avoid the payment of taxes in Canada”.
“Yes, I think it would certainly concentrate the mind if you realised that you were losing a lot of money. My own work is largely on poorer countries and, of course, I favour investment in those poor countries, but investment that generates real activity,” he told the committee chaired by MP James Rajotte.
“What you’re seeing in the Cayman Islands and Barbados is not investment in real jobs for real people, just strategies to avoid and evade Canadian laws.”
Alain Deneault, a researcher at the University of Quebec at Montreal who appeared on his own behalf, was critical of the double tax treaty between his country and Barbados.
“Canada continues to have a privileged relationship with Barbados. The binding double taxation avoidance agreement has proven to be a permanent tax amnesty for stakeholders who practise tax avoidance tactics such as transfer pricing,” he said.
“In order to set out the problem in a serious manner, the whole issue of tax evasion must be considered in light of the international deployment of an array of complacent legislation,” Deneault added. email@example.com
- Local News
- GUYANA - Probe launched into death of cancer patients
- TRINIDAD - Gov't prepares legislation to treat with asylum seekers
- GUYANA - Legislator who brought down gov't may have committed treason
- GUYANA - Gov't maintains position regarding incident involving Venezuelan navy
- JAMAICA - Twenty murders in first week of 2019
- Caribbean islands record three earthquakes in 24 hours
- Mobile App