International business minister prepared to stand up to OECD
Government has vowed to continue its rigorous defence of the Barbados’ international business sector in the face of changing policies by the Organisation for Economic Cooperation and Development (OECD) and developed countries.
Minister responsible for the sector Donville Inniss made the assertion in the House of Assembly yesterday as he accused the OECD of persistently moving the “goal post” with regards to its policies.
The latest challenge centres on the Base Erosion and Profit Shifting (BEPS) programme, which the Minister said is causing “great turmoil and upheaval”.
The OECD has contended that some companies are using strategies that exploit gaps and mismatches in tax rules to make profits ‘disappear’ for tax purposes or to shift profits to locations where there is little or no real activity resulting in little or no overall corporate tax being paid.
But Inniss argued that companies had a right to grow their business and explore where they wanted to invest their money.
“Domiciles like Barbados continue to be under great pressure as we respond to this shifting goal posts, respond to these change in policies, respond to a regime that is basically seeking to rewrite the tax policies across many jurisdictions,” he said.
Inniss was clear that the Freundel Stuart administration would continue to fight the issue and raise concerns about the unfair treatment being meted out to small domiciles.
“We have not thrown our hands in the air and said there’s nothing we could do. We have sought to get our voices heard, to be part of the discussion, to attend the meetings wherever they are being held and be part of the conversation and you can rest assured that the Government will continue in that vain,” he said.
“We will not sit over here in Barbados crying crocodile tears . . .”
There have been other challenges to the sector, it was explained.
For example, the Minister said, the European Union was proposing an arrangement that could affect the Foreign Account Tax Compliance Act (FATCA), which Barbados has agreed to enter into with the United States.
“Even with FATCA on the horizon, what is being proposed by the European Union now in terms of the automatic exchange of information is perhaps going to supersede the FATCA arrangement and become the standard for the exchange of information.
“I can give the House the assurance that my ministry, along with the Ministry of Finance, the Prime Minister’s Office and others are paying very close attention to, and we will certainly roll out the appropriate policies to not only respond to what’s happening the global arena in terms of the automatic exchange of information, but to make it clear that Barbados’ position from a policy perspective . . .” the Minister said.
In 2012, the country earned $874 million from the international business sector, 10.3 per cent of the GDP.
Some 4,519 people were directly employed in the industry, 86 per cent of them Barbadians.
More than 5,000 companies were registered in this jurisdiction.