Minister of International Business Donville Inniss has conceded that the European Union’s (EU) latest blacklisting of Barbados could have serious implications for the economy.
However, he stressed, Government was not taking the listing as a tax haven lying down as there were immediate plans to get the island delisted as fast as possible.
Inniss held a press conference yesterday where he said Government was surprised by the 38-page document which saw Barbados, along with 17 other countries, being deemed as non-cooperative tax jurisdictions.
The document, the EU List Of Non-Cooperative Jurisdictions For Tax Purposes, stated: “Barbados has a harmful preferential tax regime and did not clearly commit to amending or abolishing it as requested by December 31, 2018.”
That particular tax regime was noted as the Fiscal Incentives Act Regime. According to the Invest Barbados website, the Fiscal Incentives Act provided various tax and customs duty exemptions to corporations involved in manufacturing activities which qualified for concessions.
“When multinational groupings, particularly as powerful as the EU is, issue these kind of lists and reports, they are picked up by other groupings and organisational bodies, including financial institutions,” Inniss said during the media conference at the ministry’s Division of International Business, Baobab Towers, Warrens, St Michael.
“[They] 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 may go the full gamut of saying, we restrict doing business in domiciles such as Barbados,” he added.
The EU also stated it would indicate any resulting penalties in the future, Inniss said.
The EU document stated that this listing was given on the basis of responses received by December 4.
However, Inniss said that on December 1, Government had already told the EU it agreed to abolish the regime by September 2018, three months ahead of the December 2018 deadline.
This interaction was backdated by weeks of interactions between Barbados, the EU and various other international bodies on the matter, said the minister, so the listing was “extremely unfortunate and unfair”.
In a bid to rectify the matter, Inniss said Barbados would be sending a detailed letter to the EU requesting an urgent review of the blacklisting.
Additionally, the country would once again be calling on CARICOM to lead regional dialogue on such matters, as the region continued to come under “scrutiny and attacks” from multinational organisations.
This was not the first time Barbados was blacklisted by the EU, as it was listed amongst 30 other countries for taxation issues in June 2015.
Last month, it was named in the “Paradise Papers” as one of 19 secrecy jurisdictions, but Inniss defended Barbados’ integrity at that time as well.