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Loopholes covered, says advisor

by Barbados Today
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Top economic advisor to the Mia Mottley administration Professor Avinash Persaud

Visitors who enter the country to live and work remotely under the Welcome Stamp Initiative will not be required to pay income tax to the Government of Barbados, according to the Prime Minister’s Special Envoy for Investment and Financial Services Professor Avinash Persaud.

Contrary to recent suggestions, he insists that this will not place the country in conflict with the Organization for Economic Co-operation and Development (OECD).

In a lengthy Facebook post in response to critics of the programme, Persaud revealed that steps are being taken to ensure that visitors under the programme continue to honour their tax obligations back home in an effort to fend off the threat of blacklisting.

Last week, economist Jeremy Stephen warned that the programme could lead to accusations of ring-fencing being levelled against the Mia Mottley administration if the visitors did not pay taxes in Barbados.

On the contrary, the economic advisor argued that based on his expertise, the OECD would oppose visitors paying income taxes to the Barbados Government and revealed that a tax information agreement would be established with visitors’ home countries to address this.

“The OECD, the rich-country club that has become the global arbiter of fair tax regimes, is against people choosing to be tax-resident here rather than at home where they would pay more tax. But we are explicitly saying they cannot be part of our tax regime and must continue to pay their taxes at home, and we have a tax information agreement with their tax authorities to ensure they are not claiming to have moved and are paying taxes here. So, this is exactly what the OECD wants. No risk there,” he said.

In addition to issues of taxation, other public figures including Democratic Labour Party General Secretary Guyson Mayers have raised questions about the quality of key public services, the country’s telecommunications infrastructure and the high cost of accommodations for visitors when they arrive.

Mayers suggested that a “special accommodation rate” be considered for persons desirous of living and working here for a year as he addressed the issue on Facebook.

In response to some of the “ridiculous” criticisms, Professor Persaud expressed confidence that the programme would go a long way to fill “spare rooms in hotels, villas, condominiums and even the shared accommodations sector” which have been severely affected by the COVID-19 pandemic.

“The 1300 students at Ross had the same economic impact as 11,000 tourists because they stayed for nine months of the year. The 12-month remote work visa turbocharges our efforts to safely get the sector back, and not only bring in almost ten times more dollars than a seven-day visitor, it allows us to deal with safety more robustly than having ten times the number of one-week visitors than 12-month visitors,” said the economic advisor.

In response to claims that the programme could implicate the country in support of money laundering, Professor Persaud said: “…We will be doing the standard Interpol searches, and the visitors will be continuing to use their overseas bank accounts and credit cards for which they have had to pass international AML standards. We have this covered.”
kareemsmith@barbadostoday.bb

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