Barbados is to protest to the American state of Illinois, which has blacklisted this country as a tax haven, following the introduction of a new bill by the state’s house of representatives.
Bill HB3419, which also names Anguilla, Bermuda, the British Virgin Islands, the Cayman Island and Turks and Caicos Islands, forbids business groups or those operating in jurisdictions considered “foreign tax havens” from submitting a bid or entering into a contract with the state of Illinois.
The new measure also restricts “expatriate corporations” in the countries named from doing business with the State.
It has infuriated Minister of International Business Donville Inniss, who told Barbados TODAY he would submit a formal notice of objection to the authorities in the Midwestern state, who he said had acted out of a “genuine abundance of ignorance”.
“Once again such legislative action reflects the genuine abundance of ignorance on international tax policy matters that permeates the corridors of political power in some states and countries.
“This action by the state of Illinois was undertaken without any consultation with the Government of Barbados and seemingly was done to cause harm to the economies of several small states,” Inniss complained.
The bill sets a deadline of April 1, 2018 for the Illinois Investment Policy Board to create a list of those companies to be included on the list of restricted companies. When the list is finished it will be passed on to Illinois’ State Pension Funds, which will in turn have 12 months to get rid of any direct holdings in any of the restricted companies.
For the purpose of the state contract, any restricted company is considered as a corporation that is incorporated in a foreign tax haven and meet certain other criteria.
Last December Inniss had angrily dismissed as “wicked”, “mischievous” and “grossly misleading”, the categorization of Barbados by the UK-based aid and development charity Oxfam as one of the world’s 15 worst tax havens.
In a no-holds-barred reaction to the listing, Inniss had told Barbados TODAY the charity, which focuses on the alleviation of global poverty, did not have the credibility or authority to determine whether or not Barbados was a tax haven.
He also suggested that organizations such as Oxfam were picking on Barbados because they had concluded that the country could not fight back.
And just last week, President of the Barbados International Business Association Gregory McConnie complained that there was a worrying perception of Barbados as a tax haven, which was hampering the island’s status as a jurisdiction in which to do business.
He also said Barbados’ primary investing jurisdiction, Canada, had begun to share this perception.