23/11/20

ST. KITTS AND NEVIS: Government says it does not want to be blacklisted by EU again.

As published on voice-online.co.uk, Friday 20 November, 2020.

THE St. Kitts-Nevis government says it is implementing measures aimed at ensuring that the twin island Federation is never again listed as a non-cooperative tax jurisdiction by the European Union.

“A blacklist is a signal to the rest of the world, with whom you are engaged, that something is awry with some aspect of the governance agenda. Therefore Mr. Speaker, we will not chance those things. We have come a long way.

“We have, in the past, been blacklisted on several occasions and those who had been involved know how hard and difficult it was to move from that dissent to a place again of recognition as one who was cooperating with the good governance agenda,” Prime Minister Dr. Timothy Harris, told the National Assembly recently as he piloted amendments to the Income Tax (Amendment) Bill, 2020.

In February, the EU removed the island from its list of non-cooperative jurisdictions after indicating that St. Kitts -Nevis had “managed to implement all the necessary reforms to comply with EU tax good governance principles ahead of the agreed deadline and [is] therefore removed from Annex II.”

Annex II is referred to as the grey list while Annex I is called the blacklist. Many Caribbean Community (CARICOM) countries have accused the EU of acting unilaterally in the compiling the list and have called for their removal from the list even in the face of having complied with the measures outlined by Organisation for Economic Co-operation and Development (OECD) among other European-based agencies and organisations.

Harris told legislators that the removal of the Federation meant that in December last year after the national budget was presented “we had to go to the Parliament again to meet certain deadlines so as to ensure that by the official deadline they had given by the end of the year, our legislative framework was consistent with their expectations.

“So we have come a long way to get where we are, and it would be foolish if having worked so diligently over this long stead to get us back to where we ought to be at the apex of highly performing countries that we would allow any stubbornness to take us back down from whence we came,” Prime Minister Harris said.

The government said that the amendment to the Income Tax (Amendment) Bill, 2020 will provide the entities operating in the financial services sector and other sectors of the Federation’s economy with the clarity and certainty they require to continue to operate with confidence, to grow and to increase their contribution to the economic advancement of the Federation.

Prime Minister Harris said the amendments will further ensure full compliance with international good governance standards and will ensure that St. Kitts-Nevis meets its commitments to the EU and the OECD, while at the same time, avoiding the reputational damage.