Barbados to take case to OECD

Barbados will be telling the Organisation for Economic Cooperation and Development (OECD) that its deadline for transition to a global minimum corporate tax is way too short for this country to properly implement.

Prime Minister Mia Mottley told a news conference on Friday that as a result, she and her Director of Finance Ian Carrington will be meeting with the OECD at its headquarters in the French capital Paris on Monday to argue this country’s case for more time, especially considering that compliance would mean sacrificing about ten per cent of Barbados’ overall revenue.

The global minimum corporate tax rate, or simply the global minimum tax, is a minimum rate of tax on corporate income internationally agreed upon and accepted by individual jurisdictions. Each country would be eligible for a share of revenue generated by the tax. The Prime Minister said if Barbados does not go and make its case, it could become the victim of external decisions.

Mottley said while she was not keen on going,the OECD is in a position to put pressure on Barbados to transition.

“Most of us in the world have agreed that this [tax] is going to come. But the problem is they want transition governments by 2023, then they changed it to 2024 because of COVID. Well, 2023 and 2024 is still tomorrow for all intents and purposes.

“Therefore countries like ours have to argue that to be able to sacrifice that kind of corporation tax in that 18 months’ time period is ‘gootma’, it’s unfair, it’s wrong,” the Prime Minister contended.

“And even if you want to correct these issues, countries either have to be compensated or need a longer period of time to adjust…What you are talking about effectively is the equivalent of just about 10 per cent of our overall revenue which cannot just be put on the table so.

“Now I don’t want to go, but if I don’t go and have these conversations – the Director of Finance is going with me – then we are at risk of being the victims of decisions being made outside of our region, far less outside of our country,” she declared.

Mottley explained that her trip to Paris is part of a two-nation official tour on economic and financial matters which will see her in Washington on Tuesday on the eve of her appearance before the US Congress.

“Wednesday, I go to give evidence before Congress in the United States of America…in the Financial Services Committee. Remember we had the session here with Maxine Walters…Congresswoman Walters and all the other Congress people who came down. “When they came, they promised that they would arrange Congressional hearings for us so that we can make the case,” the Prime Minister recalled. Mottley explained that it was necessary to make a case to the US because in the Caribbean if commercial banks can’t get access to correspondent banking then trading can’t take place.

“They’ve got banks now who are refusing to take in this region, US dollars. Not local currency you know, but US dollars because there is no correspondent banking relationship. And therefore these are the battles that we are fighting,” she argued.

“On Thursday we meet with the Vice President of the United States of America to be able to report on the subcommittee that Barbados chaired, which was on the finance committee coming out of the Summit of the Americas. The Trinidadians chaired the one on energy, the Guyanese chaired the one on food and security. And we are not going there just to have a conversation. We are going there to make a few points,” Prime Minister Mottley stated. (EJ)