Minister of International Business Donville Inniss has expressed shock over this country’s latest blacklisting by the European Union (EU), along with 16 other countries that have also been deemed by the EU as global tax havens.
While saying the decision was both “unfortunate and unfair”, Inniss today suggested that Barbados was a fully cooperative jurisdiction when it came to taxation matters, explaining that it had made the required commitments to either amend or eradicate its regimes that were not in line with EU specifications by the December 5 deadline.
Inniss also reported that his counterparts in Trinidad and Tobago, St Lucia and Grenada, who along with Barbados were the only Caribbean Community (CARICOM) countries named on the latest global tax havens list, had expressed similar surprise and dismay over their inclusion.
“It is the view of the Barbados Government that to include Barbados in Annex 1, listed as a non-cooperative tax jurisdiction, is extremely unfortunate and unfair in light of, and despite Barbados’ recent direct engagement with the EU Code of Conduct Group over the past months,” Inniss told reporters during a press conference at the Baobab Towers this afternoon, following yesterday’s publication of the EU blacklist.
He also said Barbados’ work with the Organisation for Economic Cooperation and Development’s Forum on Harmful Tax Practices (FHTP) was well documented.
“I wish to state forcefully that Barbados is not a non-cooperative jurisdiction in taxation matters or any other matter. We are and remain cooperative, but true to our ideals and policies as a sovereign nation as we strive to be the international financial jurisdiction of choice,” he added.
Immediately following yesterday’s EU announcement, Opposition Barbados Labour Party (BLP) Shadow Minister for International Business Kerrie Symmonds was swift in condemning the development, which he said was nothing short of “totally scandalous”, while highlighting the failure of Government to address offensive aspects of its fiscal regime over the past ten years.
“The regime for fiscal incentives was supposed to have been moved to world trade regulation and requirement by 2007. . . [but] the truth of the matter is that little or nothing has been done in that time and therefore we have come to a situation where once again because of dithering and a failure to act in a serious manner, despite caution after caution by international agencies about certain things vital to Barbados’ interest, we have now been put in this situation when we can least afford it,” Symmonds told Barbados TODAY.
However, Inniss strongly refuted this claim by Symmonds, saying Government had not only taken the decision to remove the fiscal incentives regime, but had also communicated its intent to the EU before the stipulated deadline.
In giving the rationale for its action against Barbados, the EU said “Barbados has a harmful preferential tax regime and did not clearly commit to amending or abolishing it as requested by 31 December 2018.
Therefore, the island, which was previously blacklisted by the EU in 2015, remains on the dreaded list of tax havens and now faces the threat of possible sanctions while the EU continues to monitor its commitment “to amend or abolish other harmful tax regimes “in line its set criteria.
Today, Inniss expressed concern that the EU blacklisting could have serious implications in terms of Barbados’ ability access financing and general investor confidence.
“When multi-national groupings particularly as powerful as the EU issue these kinds of lists and reports they are picked up by other groupings and other organizations, including financial institutions. They may then decide that the cost of doing business or financing projects in jurisdictions such as ours will have to increase.
“They may also well go the full gamut of restricting business with Barbados all together,” Inniss said, while acknowledging that penalties would be attached to those on the list.
However, while making it clear that Government did not want to get into any showdown with the EU, he said it was imperative that a robust challenge be mounted immediately with a view to protecting the island’s reputation.
The Minister of International Business said officials of the International Business Division (IBD) were already in touch with the EU, in a quest to find out which regimes Barbados had not committed to amending.
Inniss also said follow calls were also made to EU this morning, but to date no response has been forthcoming.
“With respect to the way forward, Barbados will dispatch a detailed correspondence to the EU requesting an urgent review of their rather unfortunate listing. Secondly, being mindful that our region will continue to be under scrutiny and attacks from other regional groupings and multinational organisations, Barbados will once again request a regional dialogue on the matter with the goal of establishing a high level regional team of experts to engage with external parties on behalf of the region,” Inniss said, adding that “we really expect that CARICOM [the Caribbean Community] will take the lead on this matter”.