Submitted by Not Taken
French President Francois Hollande has called for “eradication” of the world’s tax havens and told French banks they must declare all of their subsidiaries.
President Francois Hollande
As a regular visitor to Barbados, I am concerned with what I am reading in the mainstream media in Canada and Barbados and the blogs. Tourism is in the tank, and the Ministry is creating two new entities to replace BTA. So now there will be two layers of bureaucracy. That should really speed things up. The Minister heads a delegation to Miami to convince the cruise lines to send more ships. I may be wrong, but I think I read somewhere that Barbados pays the cruise lines to dock at Bridgetown port; and less than 20% of the passengers disembark and spend money in Bim.
The matter about which I write is the “Tax-Haven” issue. I see that the post Low Tax Haven Jurisdictions Under Scrutiny has slipped into the older posts and is generally out of view. I may be over-reacting to or over-concerned with the Tax-Haven issue; but I think the discussion is important and should be kept in the forefront, so the Barbados authorities can not simply bury their heads in the sand.
I am repeating myself in some of the following, but I think it warrants repeating. According to recent media reports in Canada, Canadians or non-resident Canadians have $53 billion invested in Barbados in 2011. Whether Barbados is in fact a “Tax-Haven” is open to debate. In Barbados it is referred to as Foreign Direct Investment; In Canada it is being referred to as “off-shore” investments.
To be sure some of that $53 billion is legitimate investments in operating businesses which employ people in Barbados, Emera, Gildan, the Crane etc. There can little doubt though that much of that $53 billion is stashed in Barbados is strictly for tax avoidance (and in some cases tax evasion), which employs a few bookkeepers, accountants, consultants and lawyers. You posted the link to an article on page 50 of April 8 Barbados Today. Here is the original article in the Ottawa Citizen.
Here are three interesting sites concerning the writer of the Ottawa Citizen article, Bernard Shinder and (apparently) his dissolved for non-compliance former consulting company Bernard Shinder Consultants Ltd.
Mr Shinder is not exactly a disinterested neutral observer. He makes his living doing this tax (asset protection) stuff, and the article is self-serving at best. Barbados authorities should not kid themselves. While Canada may not get as aggressive as United States, I believe the Canadian Government is gong to get aggressive in pursuing the offshore investors in an effort to collect tax revenue, because:
1. They need every cent they can put their hands on to meet the 2015 balanced budget platform for the next election
2.. They have set up or are setting up the snitch line. If the snitches report names etc and nothing happens and they do not get their 15% cut they will leak the info.
3. The recent mega leak has put the spotlight on the tax-haven – tax evasion issue, the media have ramped up attention and the public (voters) will demand action. See Diane Francis’s article in April 6 Financial Post. Given that Barbados is by far the largest recipient of Canadian offshore business, it is certain to be at the top of the hit list
The media coverage continues in Canada. Here are today’s examples
With the spotlight on them, many of the tax-evaders will simply pack their (money) bags and go somewhere else. Many of the tax-avoiders will decide to repatriate their money to avoid having their names in the public eye. With tourism in decline and the off-shore business about to be under attack, Barbados authorities had better decide what will be done to replace that business; and do something soon
The blogmaster invites you to join the discussion.