Despite meeting all the demands set by the club of the world’s richest nations, including significantly slashing its domestic corporate tax rate, Barbados is yet to escape the taint of being considered a tax haven, head of the offshore business group has said.
The president of the Barbados International Business Association (BIBA) Julia Hope contends that even as Barbados and other Caribbean countries strive for even greater compliance, the Paris-based Organization for Co-operation and Development (OECD) keeps shifting the goal post.
Hope told Barbados TODAY: “What we are now cautiously looking at is that we are not out of the woods yet. This is because there is continued and renewed focus on the jurisdiction notwithstanding that we have cleared the OECD’s requirement with regards to the BEPS [Base Erosion and Profit Shifting] project. We still have a number of other hurdles to overcome for both the OECD and EU [European Union]. We are not the only jurisdiction that is faced with this and it has not come as any surprise because we were very much expecting continuous reviews on our jurisdiction.”
She noted that while much of the action has to do with keeping up with the ever-evolving nature of business and ensuring that companies pay their fair share of taxes, there may come a time when Barbados may have to put its foot down as it relates to the OECD’s growing list of demands.
She added: “The OECD with regard to Barbados was extremely helpful in ensuring that we navigated our way through what needed to be done but there are other initiatives that they are looking at . . . . When we look at the revenue coming from Caribbean jurisdictions and others that really being targeted, we are looking at one per cent of the global financial world. So, they are just picking off the small states and we now have to start fighting back and say, ‘just leave us alone because this is how as small states we survive.’”
The BIBA leader praised Government for the steps taken thus far, which include initiatives such as beefing up anti-money laundering legislation.
Last December, Prime Minister Mia Mottley announced that her administration had taken the decision to slash the domestic business tax rate from 30 per cent to between one and 5.5 per cent, and in so doing created a level playing field as a low-tax jurisdiction.
Hope told Barbados TODAY that it was too early to determine if the new measure had the desired effect of attracting more foreign investment to Barbados. But she noted that the measures had certainly invigorated the industry, as current and potential businesses have renewed confidence in the jurisdiction.
She said: “It is early days to look at new business but what we have done is retained the business that we have got and there is a confidence, not only in what we are doing, but also what the Government is focusing on.
“We believe that when it comes to it, what is really important and that is showing that we have got the good substance in Barbados in terms of the people, the infrastructure and resources to carry out the existing business and our future business. That is really where our strengths are.”