News Feed

October 23, 2016 - Barbados welcomes MV Viking Star The MV Viking Star docked for the f ... +++ October 23, 2016 - Griffith wins BLP nomination in St John   Charles Griffith will repres ... +++ October 23, 2016 - Hudson Griffith withdraws from BLP nomination for St John seat     As supporters of the ... +++ October 23, 2016 - Chelsea thrash Mourinho’s United 4-0 Source: AFP- LONDON, United Kingdom ... +++ October 23, 2016 - Relief on the way, says BWA The Barbados Water Authority (BWA) ... +++ October 23, 2016 - SSA board could face legal action, Comissiong warns Outspoken social activist and attor ... +++

Fresh OECD attack

by Shawn Cumberbatch

centralbankbuildingBarbados’ international business sector, already in the crosshairs of international tax regulators, is under fresh attack from a familiar foe.

The influential Organisation for Economic Cooperation and Development is preparing to receive “a comprehensive action plan” it said was to deal with the “erosion” of tax receipts in the world’s largest economies because businesses were “shifting” profits to a number of low tax jurisdictions including Barbados.

But while acknowledging the issue is one that merits discussion and international cooperation, the Central Bank of Barbados thinks the accusations against Barbados were “misleading”, the analysis used inconclusive, and conclusions premature.

In February, following concerns raised by G20 countries, the OECD released a report on the topic Addressing Base Erosion and Profit Shifting in which it said erosion of the tax base in these countries “constitutes a serious risk to tax revenues, tax sovereignty and tax fairness for OECD member countries and non-members alike”.

It added that “while there are many ways in which domestic tax bases can be eroded, a significant source of base erosion is profit shifting”.

The OEC also said it was “committed to delivering a global and comprehensive action plan based on in-depth analysis of the identified pressure areas with a view to provide concrete solutions to realign international standards with the current global business environment”.

The organisation pointed fingers at Barbados as among the countries unfairly benefitting from the base erosion profit shifting issue, specifically in the area of Foreign Direct Investment.

“The OECD and IMF compile statistics on FDIs based on information collected at the national level. More in-depth analyses of these data could be useful. For example, by searching through the IMF Co-ordinated Direct Investment Survey, it emerges that in 2010 Barbados, Bermuda and the British Virgin Islands received more FDIs (combined 5.11 per cent of global FDIs) than Germany (4.77 per cent) or Japan (3.76 per cent),” the report said.

“During the same year, these three jurisdictions made more investments into the world (combined 4.54 per cent) than Germany (4.28 per cent).

The Central Bank of Barbados, however, suggested the statements and conclusions about Barbados were unfair, noting that the island’s actual FDI contribution in the year quoted by the OECD “is 0.11 per cent, the same as Malta, Kuwait, Gibraltar and Panama, none of whom are mentioned in the report”.

“Barbados ranks at number 48 in the FDI table, and no other country with such a small contribution is mentioned in the report,” the bank noted.

The Central Bank said its aim was to “dissuade the use of premature inferences and conclusions about Barbados”.

“Further, the absence of reference to country-by-country data, as is available for some jurisdictions mentioned in the report, reinforces our view that it is misleading to in any way highlight Barbados in the limited analysis on foreign direct investment,” it stated.

“From a wider perspective, the added danger of employing statistics as presented may paint a distorted picture of international financial centres in the region.

“We hope that the OECD Secretariat and focus groups working on the action plan will heed to this call and Barbados will remain vigilant in an effort to make a meaningful contribution to deliberations,” it added.

The OECD said there was “an urgent need to deal with this issue” and that it was “committed to provide an innovative and timely response to it”.

“It is proposed that an initial comprehensive action plan be developed within the next six months so that the Committee on Fiscal Affairs can examine it at its next meeting in June 2013. Such an action plan should … identify actions needed to address BEPS, … set deadlines to implement these actions and … identify the resources needed and the methodology to implement these actions,” it noted.

One Response to Fresh OECD attack

  1. Tony Webster May 29, 2013 at 3:29 am

    The OECD are a bunch of psuedo-legal thugs; a club of bully-boys. Just remember where billions of dictators’ pilfered cash ends up…London; Switzerland ; New York etc. Barbados is not hypocritical, and the really nasty folks looking for a crooked bank here have always been shown the door.


Leave a Reply

Your email address will not be published. Required fields are marked *