By Cathy Lashley
PORT OF SPAIN, Trinidad (BGIS) -- Offshore companies seeking to set up their businesses in the Caribbean are facing increasing pressure, Barbados Prime Minister Freundel Stuart pointed out as he spoke to members of the media at the close of the 34th regular conference of heads of government of the Caribbean Community (CARICOM) in Port of Spain.
Prime Minister Freundel Stuart
He explained that the United States congress had just passed the Foreign Accounts Tax Compliance Act (FATCA), which binds countries like Barbados to share information with the United States Treasury about businesses that were functioning in Barbados.
He said: “This is another line of attack on our international business services sector. Understand that the reason we have an international financial and business sector is because companies take the decision that it would be more advantageous to conduct their business from abroad from a tax point of view than to do business at home where the tax base may be higher.”
The prime minister pointed out that although tax evasion was illegal, tax avoidance was not and, therefore, companies were free to do business outside of their jurisdictions.
However, Stuart noted that, over time, the OECD countries have gone after these jurisdictions, and “whenever you think you’ve satisfied the last requirement [by the OECD] another one is put before you, and that battle continues.”
“... Recall too, that the prime minister of the United Kingdom, David Cameron, said that at the G8 Summit in Ireland, the principle agenda item was the offshore sector and the fact that their countries are leaking revenue because the people who should be paying taxes on shore are paying taxes at a lower rate off shore.
“And, of course, the usual abuse and vilification and disparagement of the offshore jurisdictions has continued. I saw an interesting description of the offshore jurisdictions that I was reading referring to our side of the world, and it described them as ‘sunny places for shady people’,” he noted.
In light of this, Stuart said the reality was that most CARICOM countries were under pressure economically as a result of the present global situation, with the exception of Trinidad and Tobago, which has an oil based economy and a very strong manufacturing sector, and Guyana, which has a vast land area and mineral resources.
Consequently, the prime minister emphasised that member states of the Caribbean Community needed to deal with such issues collectively rather than individually for the benefit of the region.