EDITORIAL: Important move for presence on OECD tax forum

Minister of International Business Donville Inniss and his advisers must be congratulated on getting this country elected as a vice-chair of the Global (Tax) Forum of the Organisation for Economic Cooperation and Development (OECD) at a recent meeting in Germany.

Minister of International Business Donville Inniss and his advisers must be congratulated on getting this country elected as a vice-chair of the Global (Tax) Forum of the Organisation for Economic Cooperation and Development (OECD) at a recent meeting in Germany.

This is an important achievement given the high profile of that body and the persuasive and powerful statements and policy directives coming from it on matters connected with the regulatory cleanliness of offshore financial centres.

Barbados has had its battles with the OECD in the recent past and the major conference held here in 2001 highlighted the kind of energy and pressure which we have had to exert to ensure the survival of this vital aspect of our economy.

Since then, the importance of the offshore sector has continued to manifest itself and can hardly be overstated. In fact, the current circumstances affecting the economy have reinforced the reality that with declining sugar exports and diminishing returns from export manufacturing, we have to be extra careful in husbanding this critical resource.

We are aware of the notion that “if you can’t beat them, join them”, but we think that far nobler intentions accompanied the desire to get a vice-presidential seat around the table. The

OECD has a view about offshore financial centres, and pursuant to that view its policies are shaped and developed. Very often these policies work to the disadvantage of these sectors, and the focus seems to be on especially those centres located in the smaller islands and countries.

The policy of Barbados governments to cooperate with the OECD is sensible, and we support this national approach since it helps us to maintain the sector and the jobs and foreign exchange and general economic benefits that the sector brings.

But within recent times it has become clear that there are fundamental differences between the treaty policies of the OECD and our policy. We pursue a policy of negotiating and signing double taxation treaties, (with tax information clauses) but the OECD’s criteria for clean bill

of health, relates to stand-alone Tax Information Exchange Agreements.

We feel that our approach better suits our economic and offshore policies and we have spent much energy arguing our case after the fact.

It is for reasons like these that we need to be at the table helping to shape the policies before they are written in stone, and offering the kind of small centre perspective which seems in the past not to have attracted the kind of attention which it deserves.

It is ironic that our efforts to negotiate and sign comprehensive double taxation treaties should be treated less favourably than those countries who sign stand-alone agreements dedicated exclusively to tax exchange information only.

We note from the news report that Francoise Hendy-Yarde attended the meeting as adviser. This is noteworthy, since Mrs Hendy-Yarde is a home-grown expert who has dedicated her career to this area, and it shows that we can produce our own people capable of sitting

at the highest councils of international organisations focused on protecting our vital economic interests.

Specialised training is, of course, a key factor and we urge the Government and the private sector to explore and fund niche areas of specialised training which can help this country to promote and protect its national interests in all areas of economic activity.