Prime Minister Freundel Stuart has renewed Barbados’ commitment to the Global Forum as he called on participating countries to address “the wide range of tax and tax related issues” affecting small vulnerable countries.
Stuart said while a lot of work and effort had gone into helping many of the countries progress, nothing must be allowed to undermine the accomplishments or impeding progress.
He told the over 200 delegates attending the forum that a number of issues had to be addressed if developing countries were to sustain the progress they have made.
He pointed out that while Barbados once had a comparative advantage in sugar, this advantage had been “whittled away” with competition and the advantage was now in the area of financial services.
“We do not wish to feel that each time that we develop a competitive advantage, the playing field rules will change and place us on a path of continually having to seek new and legitimate ways of providing for our people,” the Prime Minister told the opening of the 8th plenary of the Global Forum at the Hilton.
Stuart, who is chairman of the Caribbean Community (CARICOM) said Barbados, like other small financial centres, was doing “all within its power” to comply with internationally agreed standards.
However, he lamented that despite “high level of compliance and cooperation” and the “plethora” of exchange of information agreements signed and implemented, some countries were “constantly” on the defensive.
“We have had to fight to defend our legitimacy and existence as international financial centres, a developmental goals and the well-being of our people,” said Stuart.
“We are particularly concerned that even at this stage when the Forum is considering its third mandate, there are still some member countries – even members of this Forum – that create blacklists of other countries without regard to the implications such actions could have,” he said.
The Prime Minister urged the delegates to “reflect” on the progress the Forum has made over the years, which allowed for “proper and respectful” dialogue among the interested parties.
One of the worrying issues, he said, was that some multinational financial organizations had implemented policies that use the Global Forum’s ratings “in a manner that has the unintended consequences of penalizing countries that are rated partially complaint or lower”.
“Unless such financial institutions communicate with both the Global Forum and the affected countries, they run the risk of making decisions without fully appreciating the peculiarities of the country, and the progress it is making to address the concerns,” Stuart told the opening of the two-day seminar.
“This is even more so in cases where the Global Forum itself acknowledge the progress that the country concerned is making, and is working with that country to help it to implement the recommendations. Under such circumstances, there, a country’s development goals can be compromised because of the weight given to a policy, which seems not to fully take into consideration that country’s interaction with the Global Forum’s processes,” he added.
Stuart also called for “some mechanism” to ensure that countries that have fully committed to the Global Forum’s process, and have been actively taking the steps to implement recommendations to its satisfaction, do not suffer the fate of being penalized by other agencies.
“In relation to double taxation agreements, I should like also to urge the Global Forum to encourage its members, particularly the developed countries, to take action to ratify negotiated and agreed tax treaties. It appears that in the effort to quickly implement the standard on transparency and exchange of information double taxation agreements have not been given their deserved priority.”
During the 8th meeting of the Global Forum on Transparency and Exchange of information for Tax Purposes, the 230 delegates from 88 countries and 10 international organization representatives are expected to discuss a range of issues and come up with possible solutions.