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Barbados Rejects Offshore Financial Center Slurs

by Mike Godfrey, Lowtax.net, Washington
19 April, 2016

The Barbados Government has said that Barbados is an ethical, fully transparent jurisdiction that enhances the functioning of the global economy.

The statement comes in the wake of the Panama Papers leak and seeks to counter "the propagation of two highly erroneous stereotypes – that all offshore financial jurisdictions are used to hide money and that they all erode the proper functioning of the global economy."

Donville Inniss, Barbados's Minister of Industry, International Business, Commerce, and Small Business Development, said: "We understand that government-to-government secrecy undermines the proper functioning of our global economy given that it can be used as a cover for illicit and illegal activity. Such secrecy creates a flash point for an emotional reaction that is helping to fuel an anti-offshore sentiment in many G20 nations. However, that emotion is leading to the 'country profiling' of all offshore financial centers (OFCs) – a practice that negatively stereotypes legitimate jurisdictions."

Inniss noted that Barbados has long embraced transparency and the exchange of tax information between governments. This includes endorsing the OECD's Global Standard for the Automatic Exchange of Information, and agreeing to facilitate compliance with the US Foreign Account Tax Compliance Act.

He said that in addition to "being highly cooperative and transparent, Barbados's position as a pre-eminent low-tax jurisdiction attracts business of substance and ethical business structures that provide significant benefits to both domestic markets and the global economy."

The Barbados Government said "Barbados contributes meaningfully to the international economy and does so because of its network of double taxation and bilateral investment treaties, agreements that effectively act as stimulus structures and enable global trade."

In support of this contention, the Government pointed to a recent study on the economic relationship between Canada and Barbados which said that the use of Barbados by Canadian companies had delivered significant trade, employment, and tax benefits to the Canadian economy, including 26,000 to 31,000 additional jobs in Canada.

The Barbados Government's statement concluded with the study's recommendation that "governments should work to deepen relationships with OFCs that have enhanced transparency and exchange of information agreements..."

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