BRIDGETOWN, Barbados, Thursday December 7, 2017 – The blacklisting of Barbados by the European Union (EU) could have serious implications for the island’s economy, International Business Minister Donville Inniss has warned.
A day after the EU released a global tax haven list of 17 countries considered non-cooperative jurisdictions for tax purposes, Inniss said yesterday that the decision to include Barbados could impact negatively on the country, as it could have the effect of international institutions refusing to conduct business in this jurisdiction or experiencing increased cost when trading with the country.
However, he assured that Government would be fighting to get the country delisted as soon as possible.
“When multinational groupings, as particularly as powerful as the EU is, issue these kinds of lists and reports, they are picked up by other groupings and organizational bodies, including financial institutions, who may then decide that the cost of doing business or financing projects in jurisdictions like ours then has to be increased. Or, they may very well go the full gamut of saying that we restrict doing business in domiciles such as Barbados,” Inniss said at a press conference convened to discuss the EU blacklist.
“We are very determined to ensure that Barbados is removed from that list of uncooperative jurisdictions,” the minister added, noting that there would be penalties for being on the list and Barbados would have to wait to see what those would be.
He was adamant that Barbados is not a non-cooperative jurisdiction in taxation matters or any other matter.
“We remain truly cooperative, but true to our ideals and policies as a sovereign nation, as we strive to be the international financial jurisdiction of choice,” he said.
Deeming the listing as “extremely unfortunate and unfair” to Barbados, Inniss said the island would be sending a detailed letter to the EU requesting an urgent review of “their rather unfortunate listing of Barbados as a non-cooperative jurisdiction”.
He added that Barbados would be urging CARICOM to take the lead on regional dialogue on the matter.
“…Being mindful that our region will continue to be under scrutiny and attacks from other regional groupings and multinational organizations, Barbados will once again request a regional dialogue on the matter with the goal of establishing a high level regional team of experts to engage with external parties on behalf of the region. We really expect that CARICOM will take the lead on this matter,” he added.
The International Business Minister said Government was surprised by the report that placed Barbados, St Lucia, Grenada and Trinidad and Tobago on the list.
In the report of the General Secretariat of the Council of the EU titled The EU List of Non-Cooperative Jurisdictions for Tax Purposes, it is stated that: “Barbados has a harmful preferential tax regime and did not clearly commit to amending or abolishing it as requested by 31 December 2018. Barbados’ commitment to amend or abolish other harmful tax regimes in line with criterion 2.1 will be monitored.”
The particular tax regime referred to was the Fiscal Incentives Act, which provides various tax and customs duty exemptions to corporations involved in manufacturing activities which qualified for concessions.
While the EU report stated that this listing was given on the basis of responses received by December 4, 2017, Inniss stressed that on December 1, Government had already responded to the EU, indicating it had taken a policy decision to abolish the Fiscal Incentives regime by September 2018, three months ahead of the December 2018 deadline.
Emphasizing that the Fiscal Incentives Act was not the only or main issue of discussion, he noted it was the last point on which the EU sought further explanation. Inniss stressed what was more important to note was the country’s commitment to the World Trade Organization (WTO) to abolishing that particular set of incentives and working towards replacement incentives that would “certainly be WTO compliant”.