As published on barbadostoday.bb, Wednesday 8 April, 2020.
The rising number of COVID-19 infections and deaths in Barbados is not the only battle facing Government. It must now confront a downgrade by the Organisation for Economic Cooperation and Development (OECD).
While COVID-19 infections rose to 60 and a second death was reported yesterday, the OECD released its latest peer review report which charged that Barbados’ compliance with the OECD’s standard on transparency and exchange of information on request, had fallen from “largely compliant” to “partially compliant”.
According to the OECD rating, “partially compliant” is one step up from “non-compliant”.
The announcement came from the OECD’s Global Forum on Transparency and Exchange of Information for Tax Purposes, which published eight peer review reports. It contended that the island’s legal and regulatory framework was overall in line “with the standard, including concerning the availability of beneficial ownership information”.
But the Paris-based grouping contended that the “practical implementation of the relevant rules remains, however, a challenge”.
When a country is “largely compliant”, the OECD assesses that the standard is “implemented to a large extent but improvements are needed”.
A country is regarded as “partially compliant” when the standard is only partly implemented, but at least one material deficiency has, or is likely to have, a significant effect on the exchange of information on request.
Non-compliance reflects fundamental deficiencies in the implementation of the standard.
In 2019, Prime Minister Mia Mottley significantly lowered the local corporate tax rate to align it with the international business sector at a maximum of 5.5 per cent. The move was intended to prevent black listing of the international business sector.
The move, however, has resulted in Government losing more than $40 million in corporate tax revenue in 2019.