Three days after Barbados was blacklisted by some of the world’s richest nations as a tax haven, former Prime Minister Owen Arthur has criticised the Mia Mottley adminstration’s decision to sign on to the European Union’s taxation policy.
Owen Arthur told Barbados TODAY that during his administration he refused to give the European Union any leverage over Barbadian taxation policies.
He said: “I refused to give the EU or the OECD (Organisation for Economic Cooperation and Development) any commitments. I got an opinion prepared for me by my attorney general who said that my position was justified. The EU has no jurisdiction over Barbados in respect of taxation matters and the correct approach has to be that Barbados should give no commitments to anybody about the tax policies the nation has.”
On Tuesday, the Council of the European Union – the institution representing the member states’ governments listed Barbados among ten jurisdictions it said failed to implement commitments that they had made to the European Union by an agreed deadline.
Late last year, the Mottley administration moved to bring all registered companies tax rates on par with its low tax rate on offshore businesses domiciled here.
The council said: “Barbados has replaced a harmful preferential tax regime by a measure of similar effect and did not commit to amend or abolish it by the end of 2019.”
The former finance minister said the Government of Barbados has placed itself on the blacklist by signing the taxation agreement with the European Union.
Arthur continued: “The position I held is the position that I believe in; that the OECD or the EU has any jurisdiction and that is a mistake to sign letters of commitment to an entity that you are not a member of in respect of something as fundamental as taxation. They put themselves in it and they would now have to find themselves out of it,” Arthur said.
He added the best approach would have been for Government to give no assurance to the European Union on their taxation policies.
He said: “That is what we did then, and we were on good legal grounds and perhaps I suppose I told David Simmons’s opinion to us as Attorney General then should be a document of the House when [Opposition Leader Joseph Atherley] speaks on this matter.”