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
With Hollande joining the fray are we seeing a reincarnation of the OECD aggression to tax centres like Barbados?
Hollande: Look at this guys face.
Says it all.
If he gets his wish and all Tax havens are eradicated,does he realise he ceases to exist.
Politicians have the ONLY REAL tax haven ,Government.
They live ON US.
They live,we pay.
Yes I agree TOTALLY lets ERADICATE the ability of ALL politicians to live like Kings off the backs of the Workers and Voters and its ALL JUST the PERKS of the Job.
Politicians GIVE US what you have Voted YOURSELVES and we do not NEED tax havens.
I am willing to just sit back and watch how all of this ends, it will be amusing.
you mean money laundering dont you?
tax haven?we shall see.
Hollande has to find every cent to fund his socialist policies. Many of the wealthy French are fleeing France as Hollande seeks to impose to 75 percent tax on their earnings. That’s the only reason he jumping on this bandwagon.
On another note these world appellate bodies and 1st world governments seems to want to paint every developing country with heavy offshore investment as tax havens and vessels for money laundering. Barbados has been wary of this fact and has over the years put burdensome laws and regulations in place to ensure this wont happen. But this has come about to the detriment of international business because of the many layers compliance they have to go through. More compliance equals more costs. As a result many international businesses have packed up and gone to such countries as Bermuda or the Cayman Islands. So its a delicate balancing act that must be struck. Less laws and regulations would make it seems that Barbados is a vessel for tax havens and laundering; but more laws and regualtions would be a hindrance for existing and new offshore businesses in Barbados.
If you really feel that “politicians live like kings off the backs of those who voted for them” and you are dissatisfied, then become a politician. You will then find that how politicians live is completely different from your imagination.
No rich french man or woman shall pay that 75% tax. There are always tax loop holes that old and new money pays to uncover.
This is really bad news for the members of the Barbados Labour Party wherever will they hide their ill gotten gains now.
I guess they are going to bed now with massive head aches.
Mr Carson C Cadogan do you think it is only the BLP hide their ill gotten gains, what about your present Government, and the one who was caught at the airport with his bag of fortunes. Don’t think for one minute that all of them don’t have their cash stash somewhere. You are so blinded by party interest that you cannot see that all politicians are dishonest in more ways than one, and remember the majority are lawyers.
Up to Par I see Alvin.
Never mind keep tekin de pills.
Is it not amazing that RBC is a successful bank but because of the capitalist system which fuels our success it would have taken such an action?
Looks like the French PM has succeeded in causing the wealthy to start to run from France so as not to pay taxes………………..it is coming down…….
It makes better sense when talking about corruption, to include both parties, so you do not get accused of being stupid………..it’s not worth the aggravation.
David it is the nature of capitalism. Profit is paramount.
RBC has shareholders who want the bank to pay ever increasing dividends.
Bajans better start praying.
I guess Hollande’s Army will be invading Switzerland; Monaco; Liechtenstein; Andorra and the Channel islands before he cast his eyes to the warmer climes
”Kevin – Hollande has to find every cent to fund his socialist policies. Many of the wealthy French are fleeing France as Hollande seeks to impose to 75 percent tax on their earnings.”
Now you see the problem. People ‘assume’ that France is fine economically, along with Germany.
But any country that has to impose direct taxation above 35%, let alone 75%, is failing fast.
Imagine that these people also pay indirect taxes when they buy goods and services, so that there effective tax rate is then close to 90%.
Of course they will get their assets out of France, as fast as possible.
It makes no sense for any country to tax past 35%, none, nada.
Direct taxation is the surest way of killing the economy and cashing funds to the illegitimate market.
And yes, the rich people can hide funds and hide earnings very easily….they control their businesses, unlike the PAYE middle class who cannot hide salary cheques.
Germany is the only country in Europe (with Euro currency) with a viable economy right now. Britain must be thanking the Almighty that they kept the sterling and stayed out of the Euro.
If that does not worry everyone, it should.
All the tax grabbing by the larger countries is saying, is that the world economy, is still and will continue to be ‘up the creek’.
What the tax grabbing is doing, is creating uncertainty in financial markets as to the tax structures and this will create further issues, not help settle the financial world.
Further, their tax grabs cannot be sustaining, only sustainable economic policies make sense, nor temporary grabs for cash.
Big mistake. But we in Barbados must encourage Barbadians to buy local produce and cut imports drastically, by choice.
It is far healthier anyway.
In a related story Dave Cameron and Angela Merkel are set for talks about Cameron’s demands for changes to the EU.
Full Transparency Needed to Close Down Tax Havens and Massive Fraud
James Henry: Global tax revenue lost to tax havens is between USD $190 billion and $255 billion per year, assuming a 3% capital gains rate and a 30% capital gains tax rate – April 14, 2013
Barbados will be sending a delegation to Canada to defend the sector. So says Minister Inniss.