As published on nationnews.com, Monday 25th March, 2019.
Barbados is hopeful that it will be removed from the Organisation For Economic Cooperation and Development (OECD) blacklist as a tax haven.
On Wednesday Prime Minister and Minister of Finance Mia Mottley shared part of the correspondence between the island and the OECD, which is responsible for creating greater fairness in the taxation of international profits of companies.
As she delivered her 2019/20 Budget, Mottley said that the organisation wanted commitment on five areas that the Government could not give without clarity.
She said one of the challenges was that the Barbados Labour Party, which came to office on May 24, 2018, inherited a situation where the last Government committed to removing the ring fencing between the international business and the domestic private sector.
On March 12, 2019, Barbados was returned to the blacklist. Mottley said that on Wednesday there was “a good conference call” and she had every reason to believe they would continue along the path of making serious progress “on this issue and being able to get off the blacklist”.
She said the Government had already brought 14 pieces of legislation to comply with the OECD requirement, in particular the European Union (EU) 2.2 criterion. While Barbados converged downwards, others went high.
“It seems our bold move, while being deemed as compliant with the OECD, . . . seems to have wrong-footed the European Union. And without a full assessment they branded us as an uncooperative regime . . .
“While it is the OECD and not the EU that has been given the responsibility for reaching these matters and while we are OECD-compliant, we still do not want to appear on anyone’s uncooperative list. As a result, we have been working with the EU. I wrote them 48 hours before they met to deem us non compliant and in that letter – which I will make a document of the House – we said we accepted and were committed to the EU criterion for 2.2,” the Prime Minister said.
She said that it was pointed out in the letter that while there were calls there was nothing in writing on the five matters raised. She said her response was that it could not be reasonable for Barbados to make an open-ended commitment to something as a democratic government having never seen it, and having no clarity as to its scope and no idea as to the certainty of what was requested.
The requirements were enhanced safeguards on the spontaneous exchange of information; information exchange when an offending party does not carry out research and development; unfettered access to beneficial ownership and additional safeguard of detail reports furnished by companies, or service provider.
Mottley said Barbados reiterated its commitment but wanted concrete information in writing, but the letter the day after the blacklisting said Barbados needed to be fully committed.