Barbados has been told to brace itself for the impact of a looming tax clampdown by developed countries next year.
The strong warning came from both local and international officials during a seminar organised by Deloitte Barbados and attended by several stakeholders in the local international business sector this morning.
The meeting zeroed in on a new Base Erosion of Profit Sharing (BEPS) strategy by the G20 grouping, which has enlisted the support of the Organisation of Economic Cooperation and Development (OECD), in effecting the 15-step plan.
In outlining the plan, which was released on September 16 and is due to be finalized by December 2015, Deloitte’s Global Policy Leader for Canada Albert Baker and its Tax Advisor for Barbados Doug Connell explained that the BEPS comprised a complex set of restrictive measures on international companies and jurisdictions.
They also noted that the plan came in response to the global recession that has resulted in dwindling resources for the rich countries that make up the G20.
“The types of things they’ve been looking at have been carried out over the last 30 years or more, and it’s beyond simply tax tricks or tax loopholes, many of these things, in fact, most of these things, are really government policy,” Baker said.
“This dates back to what many call the great recession. The great recession led to led to country deficits, led to cutbacks at the social programme level and many levels. That drew a lot of media attention . . . And the perception grew that not everyone was paying their fair share,” he added.
Also attending the seminar, Executive Director of the Institute of Chartered Accountants Reginald Farley
said: “The Base Erosion of Profit Sharing of the OECD is really yet another attempt on their part to take control of the world as far as tax policy is concerned.”
He said it was important that both the government and the private sector paid close attention to this latest initiative of the developed countries which will impact them individually as well as collectively.
“It is for us, as a major international financial services centre, a matter which we cannot ignore.
“Every firm pretty much needs to identify the way in which this initiative will impact on their business individually, but also as a sector,” said Farley, a
former minister of Economic Development and International Business.
Farley also told Barbados TODAY that members of the international businesses and financial services sector need to take decisive action to ensure that they are aware of the changes in international tax rules, and interpretation.
He also called on them to use “like-minded states” within the global forum of the same OECD to ensure their voices are heard.
“We should not take a position of waiting until these initiatives are concluded to react. But knowing the 15-point action plan . . . we need to have our voice heard early and try to influence the process in our favour,” he said.