UK helps Barbados with damage control over tax transparency failure

International Community wants action, not promises

A new Barbados Government press release says that the United Kingdom will upgrade our country’s status with respect to the UK’s legislation on offshore non-compliance by U.K taxpayers, and petition the OECD to reconsider its recent report about Barbados that resulted in “highly prejudicial consequences”.

Last January the Organisation for Economic Co-operation and Development (OECD) slapped Barbados upside the head for failing to comply with international standards for sharing tax information. The OECD review was part of a crackdown on money laundering and tax havens and found that Barbados “did not have legislation in place to fully share information on tax matters with international partners.”

See BFP’s January 28, 2011 article OECD: Barbados fails tax transparency standards

Barbados was once again sent to our room by the international community until we could behave ourselves and pass some laws and regulations like we agreed to do years ago but never got around to. So now that we’ve taken a few weeks and passed the new laws we’d like to come out and play with the others, and the UK is going to vouch for us.

This same scenario plays out once or twice a year in one form or another when the international community gets tired of all promises and no action. Last year Barbados was downgraded to a spot below Cambodia over our failure to fight human trafficking. This year it’s our failure to comply with international tax information standards. Next year it will be something else.

Laws? Standards? What you talking about?

You see, we Barbadians don’t like to pass laws or comply with outside standards. We like to make promises and statements of intent, but actually passing laws is another thing. Laws make it inconvenient for the ruling class to do whatever they want. That’s why the DLP won’t pass their promised Integrity Legislation and Freedom of Information laws.

Unfortunately, while we Bajans understand our leaders making promises and then doing the opposite, the international community is less forgiving than the voters.

Moral of the story: After the OECD slapped us around, it took our government about two weeks to pass the required laws because the downgrade threatened our economy.

Too bad our government won’t act so quickly to pass Integrity Legislation,  Freedom of Information and Conflicts of Interest laws. Or Environmental Legislation.

Prime Minister Stuart could make those laws happen if he wanted to.

But he doesn’t want to.

Barbados Government Press Release Damage Control

British Government believes OECD Global Forum should review Barbados tax information-exchange finding as soon as possible

BRIDGETOWN, BARBADOS, May 6 /PRNewswire/ – The British Government has advised the Government of Barbados that it will upgrade that country’s status with respect to the UK’s legislation on offshore non-compliance by U.K taxpayers.

Barbados has been notified that Her Majesty’s Revenue and Customs will promote Barbados to Category 2 status when a revised UK Statutory Instrument is made in a few months’ time.

This significant upgrade of Barbados from Category 3 status was a direct result of its 2011 Income Tax (Exchange of Information) Regulations which provides for the unilateral exchange of tax information according to the 2008 OECD standard with Barbados’ new and existing tax treaty partners, including the UK, who are now unable to exchange tax information consistent with international standards.

The British Government has also signaled its support for a revised OECD Global Forum Phase I report on Barbados’ transparency and tax information exchange credentials based on the 2011 regulations noting that “there is a strong case for a supplementary report to be presented [by Barbados] to the Peer Review Group of the Global Forum on the Transparency and Exchange of Information for Tax Purposes as soon as possible”.

The Global Forum is the multilateral framework for dealing with issues of transparency and exchange of information by both OECD and non-OECD economies. In order to carry out in-depth monitoring and review of implementation of OECD tax standards, the Global Forum has established a Peer Review Group (PRG).

“This swift and decisive response by the British Government is most welcome, and underscores the long history of tax cooperation our countries have enjoyed since 1970 when the Barbados-UK tax treaty came into force,” said Prime Minister Freundel Stuart.

The Prime Minister noted that like the OECD Global Forum, Barbados believes information exchange should be grounded in the provisions of a bilateral agreement and is pleased that during the week of May 16, this year, a protocol to our tax treaty with the UK will be negotiated to update, among other things, the existing provision on exchange of information.

In its Phase I report, the PRG cited Barbados’ inability to exchange tax information with relevant partners because existing treaties, although providing for information exchange, did not contain the 2008 standard and new treaties reflecting the standard had not yet been ratified. The PRG did however acknowledge that Barbados had done all within its power to update existing treaties and to bring its new treaties into force but nonetheless determined that Barbados would not be eligible for a Phase II evaluation of its administrative policies and practices supporting tax information for 12 months.

“Barbados has already informed the OECD Global Forum of the 2011 Income Tax Regulations and our intention to request a supplementary report on our legal and regulatory transparency and tax information exchange regime based on these regulations once the Forum adopts its draft revised methodology to provide for supplementary reporting” said Prime Minister Stuart.

The Prime Minister reiterated his Government’s disappointment with the Global Forum’s Phase I findings noting the highly prejudicial consequences of the PRG’s determination that Barbados was not eligible for advancement to a Phase II evaluation. “The assessment was particularly egregious given that the OECD itself has since 2002 endorsed Barbados as a transparent jurisdiction that has never relied on secrecy to attract investment. A policy demonstrated by our long history of codifying international transparency and information exchange norms through our aggressive and longstanding policy of tax treaty negotiation. This settled policy again received endorsement in 2009 by the G-20 and the OECD when Barbados found itself the only independent Caribbean country on their “white-list” of jurisdictions found to be in substantial compliance with international standard on transparency and tax information exchange. Indeed, this explains the currency of our standing despite the Phase I conclusion”, stated Prime Minister Stuart.

“We look forward, now, to working with our partners in the Global Forum and the United National Expert Committee on International Tax and call for the speedy adoption of the OECD Global Forum’s revised methodology to secure an outcome that serves the best interests of the people of Barbados and the wider international community.”

About Invest Barbados

Invest Barbados (IB) is an economic development agency of the Government of Barbados. IB is responsible for attracting, winning and sustaining investment for Barbados. The agency is also responsible for promoting the export of indigenous services and goods while managing and developing the Barbados business brand.

SOURCE Invest Barbados

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6 Comments

Filed under Barbados, Business & Banking, Corruption, Crime & Law

6 responses to “UK helps Barbados with damage control over tax transparency failure

  1. The man wiv no name!!

    Excellent article BFP. Well done! Hopefully, the OECD again, or some other reputable international organisation can slap Bim in the head once more and persuade it to install the other legislation to which you referred. Rightly or wrongly, I regard Barbadians as being ‘the great wofflers’ (talkers), but when it comes to actually getting things done, well that’s another matter.

  2. Crusoe

    Absolutely ridiculous. Why are you cow-towing to the OECD ‘tax grab’ ideas, the organisation has no legal basis and is merely a collection of large countries pressuring the smaller nations for tax dollars.

    Barbados’s tax rules are very transparent and indeed, moreso than Cayman Islands, Liechstenstein, Monaco, Isle of Man, Vermont, Delaware.

    Futermore, the Barbados Government has always been at the forefront of internaitonal tax treaties, indeed spearheaded the creation of international tax treaties and has one of the most extensive networks, in case you did not know.

    The fact that a number of countries are creating ‘mini-treaties’ to satisfy in law but not substance, whatever the OECD says, does not satisfy the spirit that Barbados has always.

    Indeed, barbados has shown a keen interest to maintain its proper regulaitons and work with internaitonal institutions.

    The unfortunate thing is that suckers like you fall for the OECD (One World Government subset) bilge, that they are actually altruistic in motives, rather tna being merely tax grabbing at the expense of other countries.

    Further, the OECD actions actually go against one of the pillars of traditional tax regimes i.e. tax sovereignty.

    Indeed, this is nothing more than bilge served up to grab as much money as possible, particularly in light of the continuing failures of the European and US economies.

    Thus far the US has managed to stave off disaster, but things are actually getting worse.

    In addition, the European countries have a number of failed economies and the one thought strongest i.e. Germany, is now having issues also.

    THAT is what this is about, not any supposed transparency bullshit.

    This is the same issue, in a different way, that is now playing out in Libya.

    Libya currently has huge gold reserves, foreign reserves, no foreign deficit and that has get to the crow of the large OWG (OCED), who have launched a baseless attack on that nation.

    Further, Gaddafi was one of thos who was moving away from the US Dollar standard for oil trading.

    Again, that would have caused further economic turmoil for certain countries who decided to act.

    I anticipate your rour response about human rights blah blah, but give me three answers…what are foreign forces doing on the ground..WHEN THE UPRISING STARTED, …who controls the media……and finally….with Syria butchering its citizens, why have we not heard Nato all gung ho to move into Syria also???????????

    A load of bullshit, take off the rose glasses.

  3. Anonymous

    Good dear, look who is helping Barbados with the OECD, good old colonial power who is being whip lashed every day by the good natured people of Barbados, what a irony! God save The Queen, an bless her subjects, like all the Caribbean people that live in England, and those who are retired and living in Barbados, with their pensions being sent to them every month, and are being spent in this country. What a miserable and dissatisfied lot of people Bajans are.

  4. Grabbler

    Ask former P.M OWEN SEYMOUR ARTHUR how his government dealt the blows in the OECD countries for years. The Caribbean countries need some gumption to hold off those colonial bullies called the OECD whose aim is to destroy the livelihood of the little countries of the Caribbean.

  5. anon

    More money is laundered in New York City and London than any city in the world. Why the silence in the OECD on the investigations over the US $ 378 BILLION of Mexican drug money laundered in a major US bank?

  6. the connection

    “the organisation has no legal basis and is merely a collection of large countries pressuring the smaller nations for tax dollars”

    Its exactly the same large collection of countries that allow tens of billions to be stripped out from their countries taxpayers annually and send it around the world in a tax free, cumulative daisy chain which rarely if ever returns to home base on a taxable basis.

    Now that these countries have used Barbados for decades with little or no help, they want to tighten up the transparency rules, just as she needs it the most?

    Maybe they are waiting for transparency in Barbados similar to what they already have with their treaties?