The future of Barbados’ international business sector hangs in the balance, Prime Minister Mia Mottley has warned.
Addressing the Barbados Workers’ Union 77thAnnual Delegation Conference on Saturday, she said the Organization of Economic Cooperation and Development (OECD) and the European Union “have announced we must remove all ring fencing, in other words get rid of anything called an international business sector by December 31 of this year – in four months.”
“We can choose to look at it as a blow or we can choose to look it as an opportunity . . . I refuse to be diminished by it,” she said.
According to reports, the two big deadlines now facing the Caribbean were the OECD and EU requirement for reporting under the Common Reporting Standard (CRS) by September, and the EU threat to blacklist at least four Caribbean countries that they consider to be non-compliant with anti-money laundering and counter terrorism financing requirements of the International Co-operation Review Group (ICRG) of the Financial Action Task Force (FATF).
The CRS demands that financial institutions report on the assets of foreigners to the tax authorities of their country of origin.
The OECD and EU have also demanded that countries relate to what they call “Base Erosion and Profit Shifting” (BEPS). Commentators say the BEPS is designed to punish jurisdictions that compete in tax and banks will be expected to report to more than 100 countries.
At the July CARICOM (Caribbean Community)Heads of Government meeting it was decided that a high-level task force should intervene with the EU to avoid the blacklisting of some of its member states.
Prime Minister Mia Mottley will sit on the taskforce along with Antigua and Barbuda’s prime minister Gaston Browne, Dr Timothy Harris of St Kitts-Nevis, Allan Chastenet of St Lucia and the minister of finance of Jamaica Nigel Clarke.
Mottley told yesterday’s BWU meeting that the international business sector had contributed to two thirds of the island’s corporate taxes over the last 20 years. She disclosed that when the Barbados Labour Party (BLP) left office in 2008, the Government earned $520 million in corporate taxation, however within the last decade it now struggled to earn $280 million.
Last Thursday, she met with officials from the Barbados International Business Association’s(BIBA) Task Force, led by Chairman Ben Arrindell.
Mottley said then that Barbados had to pick up more international business. She stressed that while many opportunities were available to Barbados, “enough people had to be put in place to pursue them “in a credible and structured way”.