There is a worrying perception of Barbados on as a tax haven, a view that is hampering the island’s status as a jurisdiction in which to do business, says President of the Barbados International Business Association (BIBA) Gregory McConnie.
Equally troubling, McConnie says, is that Barbados’ primary investing jurisdiction, Canada, had begun to share this perception.
The business executive said the Canadian government had been making a concerted effort to appease Canadians who had been complaining about their businesses and compatriots “who park their money in low tax jurisdictions like Barbados and don’t contribute their fair share” of taxes.
“The rhetoric continued with bodies such as the Canadians for Tax Fairness which estimated that wealthy individuals and corporations shifted CAN$270 billion into the world’s tax havens resulting in an annual revenue loss to the Canadian government of about CAN$8 billion,” McConnie told the BIBA forum on the international business sector.
He also complained that the Global Alliance for Tax Justice had claimed that “the top Canadian haven of choice is Barbados where Canadians have parked nearly CAN$80 billion”.
The BIPA president said there appeared to be a lack of understanding of the true nature of the issues and policy considerations that led to the growth of Canadian international business here.
Tax havens are commonly described as countries or jurisdictions that have a low-tax or no-tax regime, or which offer generous tax incentives.
However, tax havens are also sometimes linked to more nefarious activities such as enabling the hiding of assets and tax avoidance.
McConnie said while Canada’s perceptions of the country’s tax policy may be the biggest worry, it was not the only one.
“Just this year the country was placed on a blacklist by the UK-based aid and development charity Oxfam as one of the world’s 15 worst tax havens. Investipedia, a leading source of financial content for the web, has Barbados listed among the Top 10 Caribbean tax havens, even though it mentions that Barbados is not a ‘pure’ tax haven . . . [and] that it is a very low-tax environment for offshore corporations incorporated in Barbados,” the BIBA head said.