Chris Sinckler, Minister of Finance – Fyi
There is also the question of whether global reforms could disadvantage Canadian-based multinationals, which have increasingly looking to offshore jurisdictions, most notably Barbados, as conduits to invest overseas. More than $60-billion flows through or is kept in Barbados, where the corporate income tax rate is 2.5 per cent. While some of that is private wealth being stowed offshore, much of the money is being used by Canadian companies doing business in other countries around the world – Global watchdogs take on the corporate tax dodgers
There was a time when tax treaties with little islands like Barbados gave the opportunity to foreign companies (captive insurance) to exploit tax structures to secure profit. In a post OECD active world, developing countries including Barbados, have had to withstand the piercing glare of the most powerful countries in the world. In is instructive this weekend finance ministers from the world’s 20 largest economies have gathered in Australia AND the main agenda item if you are curious? “ To to squeeze billions of dollars more in taxes from the world’s largest companies … to plug the gaping loopholes in the international tax system that allow multinationals to slide substantial profits into tax havens or low-tax countries, depriving governments of badly-needed revenue”.
It is an open secret the opinion OECD counties hold for countries like Barbados who use double taxation treaties to lure multinationals from developed countries. Minister Donville Inniss, as is his wont, has voiced his displeasure at the OECD moving the ‘goal post’. The world’s powerful countries are intent on blocking flight of capital from their jurisdictions and Inniss can continue to utter his usual high level of political rhetoric, there is not one iota he can do about it.
The International Business (IB) sector in Barbados is reliant on Canada for a significant share of its business. Because Canada’s economy has been faring better than the US, Europe and other countries across the globe Canada Revenue Agency (Canadian government) has not been as aggressive to shine a light on Canadian multinationals engaged in tax avoidance activities across the globe.
Tourism and the IB sectors are the only significant drivers of the local economy. Growth in the tourism and IB sectors have been anaemic in the last five years mainly caused by a weak external environment interacting with lethargic strategy and tactical responses from government. It is clear the intent of the meeting in Australia this weekend, significant changes are coming and have been signalled for a long time. If countries like Barbados are to sustain a standard of living we have become accustomed, we must proceed to make seismic strategy shifts in quick time.
All accept there is merit in the benefit of a double taxation treaty designed to prevent multinational entities paying tax on profit in multiple jurisdictions in which they operate. However the OECD is of the view the landscape in which multinationals operate has become too complicated and has given rise to a cadre of high priced accountants and lawyers whose key accountability is to exploit the system for the benefit of the multinational at the expense of the home country. It is a space where several countries have seen the opportunity to create economic activity by lowering the bar to become no-tax or low-tax jurisdictions. “Tiny Barbados, for example, is the third most popular destination for investment flowing from Canada, just behind more obvious destinations such as the United States and Britain.”
A regret of BU is the paucity of financial reporting in the Barbados media space. This was exemplified recently by the Governor of the Central Bank cancelling quarterly press conferences in favour of a staged show hosted by his friend veteran journalist David Ellis. It does not speak well about the level of investment in education we have not been able to facilitate an environment where young MBA or similarly credentialed Barbadians should feel encouraged to aspire to be media practitioners.
The world is changing apace, maintaining existing or even establishing new double taxation treaties will NOT make for better.
Thanks DD for the heads up!
The tax burden in the developed countries falls largely on wage earners who are being squeezed relentlessly and their frustration has boiled over on to the streets – Occupy Wall Street, the London protests/violence outside and even occupation of the offices of the Multi-nationals.
The ability for large corporations to earn their profits in developed countries and move them to shell companies based in off-shore tax havens has forced governments to focus on the practice, made more urgent because of the serious impact it has on their economies at a time when their citizens are finding it difficult to get by day to day and finding the squeeze getting tighter and tighter.
Even Warren Buffet has said that it is ridiculous that his secretary pays more in tax than he does.
The late Steve Jobs drew an annual salary of $1.00 from Apple, paid no tax and enjoyed a very affluent lifestyle.
Microsoft and others pay very little tax anywhere despite the huge profits they make.
The tax havens are not where their profits are made and are often just a small office with a few lawyers.
The impact on the producing countries is significant and the practice had to be tackled eventually.
Some commentators even question the benefits accrued to the off-shore tax havens as no tangible development of those economies through which such huge sums flow.
Sadly taking such drastic action leaves these off-shore economies to solve their own problems however they can.
Barbados was warned.
“Canada’s former LIBERAL PARTY Prime Minister and Finance Minister, Paul Martin, used Barbados for his Canada Steamship Company to avoid Canadian taxes, plus Panama registration on the ships.”
Now you know why Harper and the Conservatives will throw Barbados under the bus.They can claim that the Liberals created the “tax Havens”.
Canada is a FRIEND of Barbados…….or not.
@Sid Boyce
Even Warren Buffet has said that it is ridiculous that his secretary pays more in tax than he does.
++++++++++++++++++
Not quite correct, his secretary’s wages are taxed at a higher percentage than his earnings but she doesn’t pay more in taxes than he does.
What will Barbados replace the Financial services Industry with?
We all will have to look at the land of Barbados and set the records right,
We need to be able to if needed tax our self evenly across the land and not just the poor paying a bulk of the taxes where needed,
Government dont tax them self not the Ministers moving all land and buildings in to their pvt retirement fund,, , the bigger 60 crooks liars and scumbags get, the more land they move in their pockets just look at Minister who lost the last election and pull back in buy a crook PM Fumble,
Crooks looking out for crooks,
It good to see People are getting the point , yet looking to avoid to reason and proof of the land issue,
White Bankers and other with brains up north know , but Barbados have to face the facts or just long talk till the good ship sinks, The bankers of the world watching Niggers at work , DLP and BLP ,
TAXATION is THEFT, THEFT is EVIL, TAXATION is EVIL.
It is totally wrong and evil for the government of Barbados to be at whatever times stealing and robbing the relevant people, businesses and other entities in this country of any portions of their own remunerations.
This is horrific by any proper political measure and any citizenry of Barbados must REVOLT against this evil wicked TAXATION system in this country.
PDC
Even the lack of quality to blogs like this one from BU commenters paints a picture that reflects wider society. There is a heavy ignorance when it comes to financial issues and this is why the politicians do and say what they like without serious challenge.
HI Sargeant,
Thanks for the correction.
It still illustrates how easy it is for the relatively rich and super rich are able to avoid tax whilst the rest of us get what amounts to demands for money with menaces.
On retirement I got a “threatening” letter from the tax office stating that I was legally obliged to submit an annual tax return and that failure to do so would subject me to court action.
Members of parliament in the UK who are not that well paid have served prison sentences for enhancing their salaries through the expense claims whilst massive evaders such Starbucks, Amazon, Google, Barclays Bank and the like have not had a hair put out of place.
For thousands of pounds you “do porage”, for billions of pounds you walk free.
David wrote “There is a heavy ignorance when it comes to financial issues”
The average person does not pay attention to International news about Finance.
We got into the Tax Haven bed with Canada when it was “beneficial” to a former Liberal party PM of Canada and other rich Canadians.
Now the Conservatives are in power in Canada and they intend to stop Canadian companies from using Tax Havens.
Barbados needs a new game plan to replace the Financial services industry.
@Hants
Religion and politics, this is what we are versed.
Would have been a different race with his teammate in it but congrats all the same.
@Crusoe
If you read the article closely the author seems to be pointing to the concern about neutralizing what they called mismatches along with a few other inconsistencies:
.
Lewis wins. Enjoyable morning for me.
One of the points of the OECD is that tax should be paid in the region in which the income is derived.
Now, are the US, UK, France, Germany, Canada etc willing to allow manufacturing corporations to pay their larger portion of income tax. in China, Japan, Indonesia, Thailand and Korea?
They SHOULD, because merely selling items in the OECD countries ISD NOT ENOUGH, to determine where the bulk of the work to get the items to SALEABLE condition is done in the OECD countries.
The large portion, maybe 80-90 percent of the manufacturing and packaging is done in the eastern countries mentioned.
Therefore, the larger portion of the taxes should be paid in those countries, NOT the OECD countries.
Similarly, the oil producers, should pay the bulk of their taxes in the Middle East, where the largest portion of the goods (petrol etc) is derived.
Are the OECD countries willing to live by their OWN rules?
But I expect they will try to navigate through that truth, by some haphazard reasoning.
But that is the reality. They are NOT entitled, according to their own rules, to tax corporations that heavily manufacture outside of the OECD.
And some of those countries need to take them up on it, fighting for their fair share of tax revenue, based on where the bulk of work to get the sales items to saleable condition, takes place.
Errata ”IS NOT ENOUGH, to determine tax position as being payable in the OECD countries, in circumstances where the bulk of the work to get the items to SALEABLE condition is done outside of the OECD
Quoting BU ”The world’s powerful countries are intent on blocking flight of capital from their jurisdictions and Inniss can continue to utter his usual high level of political rhetoric, there is not one iota he can do about it.”UNQUOTE
But Minister Inniss is right on goalposts. The reality is that a significant amount of investment by OECD countries is in India, China, Japan, etc and used for manufacturing and also services such as on call assistance for various industries.
Where is the tax for these businesses paid, it SHOULD be paid in those countries and NOT the location of the ownership company, because the bulk of the work of services and also manufacturing is done in those countries.
What is the betting that the OECD countries will want the tax paid for those industries paid in their honeground, not where it should be i.e. where all of the real work is done?
Goalposts….. IS RIGHT!!!!!!!!
On use of overseas industrial production, further, how many of OECD citizens lost jobs, because the owner corporations moved to the Eastern countries, for CHEAP labour???
Is that right? If we are in ‘globalization’ (ha…globalization indeed, means my apple is mine and yours Is mine too), then surely there should be similar equalizing labour costs as for taxes, as the OECD is wanting to allege?
Ooooh….. bit hairy here, are we?
But then, surely also, if globalization, why aren’t taxes applied at country of where the WORK is being done? Surely that would make sense?
What IS globalization then, just another word for re-colonisation and profiteering at the expense of smaller nations?
Bah humbug.
@David,
If you want to create a truly fair international tax scheme, you cant pick and choose your playing field, you need to look at all aspects and I am merely pointing out inconsistencies in their approach.
CONVENIENT inconsistencies.
And, taxation strictly IN THE COUNTRY OF PRODUCTION will serve to remove hybrid mismatch arrangements.
Why is THAT solution not on the agenda???
Bah humbug again!
globalization is a code word for the rich given ” the right” by legal means to fleece the poor countries
@Crusoe
The world’s capital belongs to the G20 and they can move the goal posts if it fits their geopolitical interest and there is nothing Inniss or any 2×3 country like Barbados can do about it.
@Hants
Thus is why when you are making the money, benefiting from the good times you provide girl the winter.
true dat,, but that does not mean that these 2×3 should stay silent letting these high rollers steam all over them.. there is always a need for message and if repeated long enough, others in similar situation take heed and join making what seems impossible possible,there is no limitation in the power of the word .
David wrote “there is nothing (PM or Minister) any 2×3 country like Barbados can do about it.”
That is correct David.
However Barbados allowed Canadian banks FREEDOM to dominate our banking system.
Barbados allowed Canadians to buy land and build hotels and developments.
Colony club, Caricana, Sunset Crest, the original Limegrove were all “Canadian”.
Then Canadian Corporations used tiny little Barbados to save Billions in taxes.
In the overall scheme of things Barbados has been used, abused and will be kicked to the curb.
Yes we tek de licks in de name of progress (bling)
David it is now up to Bajans to find ways to recover from this economic recession that require massive sacrifice and new business models.
We will be forced to correct our mistakes.
@Hants
The three economic drivers in order of contribution:
Tourism
International business
FDI
David we need to add more good eggs in the basket.
The OECD countries cannot be trusted. They are greedy Capitalists for the most part.
Barbados needs to diversify the economy.
We have a lot of fellas with degrees. Surely they can come up with ideas to help bail the water from the sinking moses called Barbados.
David you know wha a moses is?lol
Until Barbadians admit we have been living above our means we will continue to squeeze the existing economic model to feed our voracious consumption style.
On Sunday, 21 September 2014, Barbados Underground wrote:
>
First, it occurs to me that “Double Taxation Treaty” is a misnomer for what should be called ‘Taxation Reduction and Transfer Treaties”.
For those who did not go to the “goal posts” link posted by David, here are excerpts
“Government has vowed to continue its rigorous defence of the Barbados’ international business sector in the face of changing policies by the Organisation for Economic Cooperation and Development (OECD) and developed countries.
Minister responsible for the sector Donville Inniss made the assertion in the House of Assembly yesterday as he accused the OECD of persistently moving the “goal post” with regards to its policies.
The latest challenge centres on the Base Erosion and Profit Shifting (BEPS) programme, which the Minister said is causing “great turmoil and upheaval”.
The OECD has contended that some companies are using strategies that exploit gaps and mismatches in tax rules to make profits ‘disappear’ for tax purposes or to shift profits to locations where there is little or no real activity resulting in little or no overall corporate tax being paid.
But Inniss argued that companies had a right to grow their business and explore where they wanted to invest their money.
“Domiciles like Barbados continue to be under great pressure as we respond to this shifting goal posts, respond to these change in policies, respond to a regime that is basically seeking to rewrite the tax policies across many jurisdictions,” he said.
Inniss was clear that the Freundel Stuart administration would continue to fight the issue and raise concerns about the unfair treatment being meted out to small domiciles.”
In his 1 hour and 8 minute speech to DLP Canada’s Errol Barrow Memorial Dinner in Toronto last might, Prime Minister Freundel Stuart comments included:
“Barbados is continuing to experience some of the aftereffects of the global economic downturn. We have put in place a 19 month program of rehabilitation of the Barbados economy That program has been working quite well. Of course our foreign reserve situation has stabilized, therefore there is no threat to Barbados’ exchange rate, the Barbados Dollar is safe in relation to the US Dollar.
We continue to have challenges not unlike the challenges being experienced in the UK, USA and here in Canada, challenges of our deficit because our tax revenues have been facing acute challenges because of the slowdown in business and as result we have had to put in place measures not always as palatable as one would wish, but you know the doctor cannot be concerned about how sweet the medicine is, he has to be more concerned with how effective it will be.”
The UK, USA and Canada and other OECD countries are facing fiscal deficits due in part to challenges to their tax revenues; caused in part by the complex tax avoidance schemes conceived by the multinational corporations and wealthy individuals using the tax treaties.
OECD efforts to “move the goal posts” are not going to go away because of Donville Inniss’ rigorous defense of the Barbados’ international business sector.
The Prime Minister’s comments also included:
“The first fifty years of independence were years in which the Government of Barbados assumed responsibility for everybody in society, everybody got free healthcare, free education, free this and free that.
The next fifty years of independence cannot be the same as the first fifty years . We have a completely different society now and people are going to have to assume a greater responsibility for the development of Barbados.”
Similarly the next fifty years of tax treaties cannot be the same as in the past fifty, and Barbados will have to find new sources of tax revenue to replace the revenues it has enjoyed, but will see diminished, from the international business sector.
David said “The world is changing apace, maintaining existing or even establishing new double taxation treaties will NOT make for better.”
DD says “Maintaining existing or even establishing new double taxation treaties will NOT be an OPTION.”
@Crusoe
Check out the Mission Statement of the OECD:
@ David,
Yeah, and while we fight for survival, a ‘real’ threat to no one, they pump billions in aid to countries and unwittingly foment the generation of radicals such as ISIS that stab them in the back….aka like Pakistan that harboured Bin Laden whilst skinning teet with the West.
Ha…that is Karma for you.
What is the betting most of the money that started the group ISIS, training etc, came from ‘backdoor security agencies’ of these same OECD countries.
Be careful when you train a dog to bite…. he will soon bite you too.
It is no coincidence that while they crucify the small nations who are merely trying to survive, the angst from radicals in increasing directed at them.
Something simple and universal that NO ONE part of mankind has power over…. and no ‘2X3’ (relative terms here) major nation can do anything against that either….. no matter how many conventions they hold.
It is called the Universal Law of Karma.
Given the article VAT problem to be looked at in todays Advocate, it looks like Barbados is under threat from VAT.
http://www.barbadosadvocate.com/newsitem.asp?more=business&NewsID=38915
@Due Diligence | September 21, 2014 at 6:44 PM |
“The Finance Minister said that some of the recommendations suggest that a lot of the zero rates should be turned into exemptions to get away from the issue of claiming back of the VAT, as it takes time, staff and resources to achieve that. He said that he hopes to get their feedback soon, as some of the issues are to be addressed in the upcoming budget.”
If the VAT system is to work efficiently and effectively then nothing should be exempt from VAT except unprocessed food items and financial services transactions.
Not even medicine or medical services unless provided free of cost by a State-run health care provider.
Barbados will lose its Tax haven business in the near future. It is doomed.
So lets look at new or copied ideas. Maybe a minister will read BU and use one of our ideas.
Here is one of mine.
Solar powered electric charging stations for the electric vehicles that will be imported duty free……sooner or later.
Returning retiring Bajan dream car.
http://www.teslamotors.com/en_CA/models
Barbados is such a small country that it is seems to be perfect for Electric vehicles..
@Hants
Rolling out electric cars is one part of the equation. The other part of the equation is being able to generate clean energy. Rollout electric cars that have to rely on a fossil energy takes us no where.
David that is why I posted this idea at Hants | September 21, 2014 at 10:32 PM |
“Solar powered electric charging stations for the electric vehicles”
OFF GRID SOLAR POWERED CHARGING STATIONS.
My inspiration.
http://www.cbc.ca/passionateeye/episodes/revenge-of-the-electric-car
Barbados is waiting for a foreign investor who will partner with a local front man to make sure they can make mega profits.
We all know that in 10 to 20 years Solar energy will provide a substantial portion of Electricity in Barbados.
“We got into the Tax Haven bed with Canada when it was “beneficial” to a former Liberal party PM of Canada and other rich Canadians.
Now the Conservatives are in power in Canada and they intend to stop Canadian companies from using Tax Havens.”
On the other hand. will it not be fair to say then that tax havens thrived and the Treasury of Barbados benefitted significantly when the Republicans were in charge in the USA coming under threat when the Clinton led administration was in office.
@Hants
You are correct, missed it.
@balance
We have to do, it does not matter when the shift started.
Every citizen in Barbados has every right and business to protect his or her OWN remuneration against the government of Barbados using this evil wicked TAXATION system to steal and rob them of what is duly rightfully theirs – the otherwise stolen parts of their own remunerations by an evil wicked government.
The eight commandment of the Holy Bible makes it absolutely abundantly clear – Thou Shall NOT STEAL.
And this is what these evil wicked DLP/BLP governments have been over the years villainously doing to the remunerations of the relevant people, businesses and other entities in this country, and criminally doing to the psychologies moralities of the personhoods themselves and to the psychologies moralities of those that are the owners/managers of businesses and other entities in this country.
There is obviously no escape by the government of this country that its immoral criminal tax thieving actions continue to have increasingly widespread and destructive material financial implications for and repressions to the further holistic growth and development of this country.
Therefore, in respect of its operating this thieving TAXATION system, it is the continuing immoral illegal conduct of the government of Barbados, against the relevant citizens of this country that must – in the first place – be dealt with outlawed by parliamentary groups emerging from the vast majority of these same citizens to do the same, before, et al, notions of citizens/non-citizens and groups of citizens/non-citizens investing inside or outside of Barbados can be seriously entertained by whomsoever.
PDC
Hants | September 21, 2014 at 10:46 PM |
Barbados is such a small country that it is seems to be perfect for Electric vehicles..
………………………………………………………………………………………
Perhaps if electric cars were coming into Barbados duty free, they would attract more buyers. Some of the cars are now costing in the region of $130,000. At present , the life expectancy of the battery , the lifeline and heart of the car, could be some 5/6 years, and a replacement battery, not including duty and the other taxes that the government will impose on an imported battery could be as high as $20,000,added to the specialist charges from the local agency to change out a battery.
At the end of five years service, the fees associated with the replacement of a battery, would be similar to the final balloon payment that some car dealers level on Hire Purchase Car buyers.
Then there is the environmental problem, which seemingly has not been addressed , regarding the disposal of these batteries.
There seems to be a big push in many quarters towards electric cars, as opposed “Natural Gas” cars.
On the issue of consumers retrofitting their homes with RE systems we read this weekend there is a waiting list because of the recent increase in the cap by the FTC. How frustrating.
@Colonel Buggy I agree they should be duty free and we need a smart rich entrepreneur to build OFF GRID Solar powered charging stations.
David there must be something “special” about Barbados.
Those of us living in Canada are seeing the use of Solar Electricity growing.
It is difficult for me to understand why people are not encouraged to install Solar systems at their houses.
Sorry. my bad. Forgot we have to protect Emera.
Why am I wasting time on this subject?
I forget oil rich Trinidad own Barbados so we don’t need nuh alternative energy.
Hants | September 22, 2014 at 1:04 PM | @ light and power may be out of business and taxes and VAT will be less for the DLP fraud government , If Bajans had the money they would go Solar all the way , maybe 100% and back up would be LIGHT AND POWER ,
THE price they are charging is so high that only companies have the money to put forward , Most Bajans roofs can support Solar cells on roof and most dont have enough land between to use,
It may take one years pay and a loan not know how long work will last.
after being cut off from LIGHT AND POWER for 6months ,, to reconnect will take inspections and up grade which will run in to the thousands of dollars, Remember bajan at this have to funds to invest not gamble,
All see to be seat against them ,
Remember by the time you see the prices where you live times it by 3 to reach Barbados and labor,
Bajans on Life support , just looking for nature and the tress to show some food to past a meal by, mango, cherries, plums , sour soup and fish.
its a good thing the fish not on the land for these fffers would build over them just to sell a house,Kill off all the fish and import from Japan nasty waters.
@Hants
They are those who believe there is an unreliability factor by a household being 100% dependent on solar. The sun does not always shine.
Unreliability? In Barbados? I don’t think so.
Here in England I have the surveyor coming around tomorrow to measure up for installing solar panels.
It will lower my bills and the excess will be sold to the national grid – there is a minimum sum guaranteed based on a formula by government.
On a funny note, one guy had his payments temporarily refused because they seemed excessive until it was verified that his meter was not faulty.
Lucky man, he lives near to a football stadium and the lights charge up his system when home games are on.
The reference to reliability has to do with the way the power companies define it. It is why alternative energy is allocated x% on the grid and described as intermittent.
intellIgent people know that the only energy that can not be stored is that of ATP Ah lie?
I read an interesting article in today’s Daily Nation relative to the OECD’s claim that Barbados is partially compliant with “the legal and regulatory framework for the exchange of information” it has signed onto as one of the Global Forum On Transparency And Exchange Of Information For Tax.”
The OECD has also made some other very interesting observations about Barbados as follows:
1) Of all LAC countries, Barbados’ government spends the most relative to the GDP: close to 42%
2) Barbados is the only country in the region where the internal audit policy requirements are not approved by the legislature.
3) Despite collecting revenues of over 9,000 USD per capita, a record in the region, Barbados’ government has the highest debt per capita in the region: over 19,000 USD.
I refer BU to the document: “Global Information on Transparency and Exchange of Information for Tax Purposes: Supplementary Peer Review Report, Phase 1: Legal & Regulatory Framework – Barbados”, page 21: A.2, Accounting Records:
“Jurisdictions should ensure that reliable accounting records are kept for all relevant entities and arrangements”:
General requirements (ToR A.2.1.), Underlying documentation (ToR A.2.2.) and the 5-year retention standard (ToR A.2.3.)
43. The Phase 1 report concluded that Barbados legislation does not ensure that reliable accounting records or underlying documentation are kept for all partnerships and trusts. In particular, it was considered during Phase 1 that partnerships that are not subject to the Income Tax Act have limited accounting obligations under statute law. Similarly the Income Tax Act accounting obligations do not apply to some international trusts and foreign trusts administered in Barbados when no trustee is resident there. A recommendation was therefore made that all relevant entities and arrangements should be required to maintain reliable accounting records including underlying documentation for a minimum of 5 years.
44. Barbados has not submitted any legislative changes relating to the record-keeping requirements for these partnerships, and the record-keeping obligations of the Money Laundering and Financing of Terrorism (Prevention and Control) Act, 2011 are not sufficient to meet the standard. Therefore, no changes have been made to the recommendation concerning obligations to keep accounting records for partnerships and trusts, or the determination for element A. 2.
David wrote ” there is an unreliability factor by a household being 100% dependent on solar. The sun does not always shine.”
There are all kinds of pros and cons and it is easy to keep paying Emera if you can afford to but with some intelligent planning you can install a Solar system with battery storage that is efficient.
Diesel generator for backup if you are Dr.Gp working from home.LOL
@Hants
Some others more qualified can address the issue of storage, one gets the impression that it is a developing technology and affordability is in play.
Batteries for vehicles are presently being built here
The knowledge of how to build batteries to store solar energy is readily available.
Solar storage batteries can last for upto 5-7 days without receiving a charge……very unusual to lack sunlight for that period…..note even when overcast the suns rays are still hitting earth.
.
@Vincent
Who builds solar batteries in Barbados and what size capacity are we talking about to function as an adequate contingency.
Wha de brassbow!!!
http://www.ctvnews.ca/world/canadian-woman-arrested-at-jfk-with-guns-drugs-in-checked-baggage-1.2018667
Just saw that on CP24. on tv.
David | September 21, 2014 at 7:14 AM |
“Even the lack of quality to blogs like this one from BU commenters paints a picture that reflects wider society. There is a heavy ignorance when it comes to financial issues and this is why the politicians do and say what they like without serious challenge.”
Is this post about OECD or alternative energy and electric cars?
As it relates to your comment re “There is a heavy ignorance when it comes to financial issues and this is why the politicians do and say what they like without serious challenge…”, this comment is quite true. Government ministers negotiate and enter loan and policy agreements on behalf of Barbadians, without full disclosure of the contents or stipulations of these agreements.
Instead of using the Barbados Government Information Service to inform the populace of these negotiations and policy agreements, that entity is used to “big-up” politicians.
The absence of such information makes it impossible for anyone to make an informed assessment or evaluation of these agreements.
@Artax
You should know by now BU gives commenters some latitude to discuss issues top of mind especially if constructive.
Yes David like the story I just posted. Woman had a ticket toBarbados hence my off topic post.
@ Hants | September 22, 2014 at 1:07 PM |
“Why am I wasting time on this subject?
I forget oil rich Trinidad own Barbados so we don’t need nuh alternative energy.”
So Hants, you now cotton on to the constraining economic realities confronting Barbados in its push to move at a faster pace in the RE lane?
It seems that long-established magnates (oil barons) like J P Getty are getting out of fossil-based energy production and distribution industries by way of investment selloffs or through downsizing of capital expenditures plans and switching to the emerging renewable energy sunrise industry.
Maybe this Damascene conversion is out of a bleak apocalyptic vision of the future painted with the fears of climate change; or even a form of moral retribution for the ecological damage caused by fossil fuels on the planet resulting from their past profiteering greed.
You will not find that kind of zesty vision in the Trinidad-control East Caribbean energy market.
Barbados is an important market for Trinidad oil exports. Any major switch to alternative energy uses in Barbados would ruffle Trinidad’s feathers. Trinidad would clearly use its control over the Barbadian economy to dictate energy policies even by allowing Emera to set the conditions to ensure its fossil-based investment is not jeopardized.
Have you ever considered why Barbados did not approach Trinidad for balance of payments financing instead of going to Credit Suisse with their onerous debt servicing terms and conditions?
Couldn’t T&T facilitate Barbados (its captured market subsidiary) through a loan equivalent to 1 year oil imports? After all, for T&T, it would be like taking $100.00 from the right pocket and putting it in the left one.
@millertheanunnaki,
I live in energy rich Canada yet in major cities like Toronto, solar electricity is being embraced so it is difficult for me to accept that Barbados would not be charging forward with alternative energy especially Solar.
Almost everyday I drive by a solar powered street light. I recently worked in a building that had over 100 solar panels on the roof and the energy was sold to Ontario Hydro.
So my simplistic reasoning is that Barbados is in a great position to use the ever improving Solar power technology.
David you should check this web site
http://www.emera.com/en/home/default.aspx
Governor of the ECCB’s reported observations about the structure of the Barbados economy and how it is being managed is interesting:
As it seems a good fit here, am taking the liberty of copying the following from post of millertheanunnaki | September 21, 2014 at 7:09 PM | in the Tourism sector a cadre of beggars blog
“Nothing will be done by the powers-that-be until the forex runs out and the OECD put an end to the glorified tax avoidance business (aka offshore financial services sector) that has as much moral integrity as international drug trading.”
Am copying the following from my comment above:
In his 1 hour and 8 minute speech to DLP Canada’s Errol Barrow Memorial Dinner in Toronto on September 20, Prime Minister Freundel Stuart comments included:
“Barbados is continuing to experience some of the aftereffects of the global economic downturn. We have put in place a 19 month program of rehabilitation of the Barbados economy. That program has been working quite well.
Of course our foreign reserve situation has stabilized, therefore there is no threat to Barbados’ exchange rate, the Barbados Dollar is safe in relation to the US Dollar.”
Sounds like happy days must be just around the corner.
re “Governor of the ECCB’s reported observations about the structure of the Barbados economy and how it is being managed is interesting:
It seems a bit of a stretch to compare a country of 285,000 people to countries of 5.4 million (Singapore) and 23.3 million (Taiwan)
It’s not the numbers that makes the difference between Singapore and Barbados.
When Errol Barrow was prime minister, one of his ministers was quoted in the Advocate as saying almost every Barbadian could read and write but few were functionally literate.
Singapore’s educational systems turns out highly functionally literate individuals that are able to create and innovate so making that small island very productive and prosperous.
The education system in Singapore is the benchmark that the UK with 13 or so times the population hopes to emulate, a goal they set only last year.
You would have to work or collaborate with Singaporeans to appreciate their work ethic and capability.
It’s the place where you would see guys in their late eighties hard at learning another dialect of Chinese.
Singapore owns the Australian Stock Exchange, runs a successful airline, owns and runs large ports in many countries and more. The Singapore army runs at least one super-computer that they built themselves.
Besides what they do themselves, corporations like HP have Singapore based development centres to take full advantage of the productive talent available there.
Not long ago when Microsoft acquired Nokia and shed a good portion of the Nokia staff, a number of the guys in Europe decided to start up a company designing and building mobile phones – in Singapore, reason being that they could find the talent there, ready and available to make their venture a success.
A new program at the Canada Revenue Agency that promises to pay informants who help track down tax cheats — a first in Canada — has generated a flurry of more than 1,000 calls leading to nearly 100 active cases, the Financial Post has learned.
The CRA established the incentive-backed program in January to crack down on international tax evasion and “aggressive tax avoidance.”
The Offshore Tax Informant Program, or OTIP, holds out the promise of financial awards for individuals who provide information that leads to the collection of taxes owed due to “major international tax non-compliance.”
See full story at:
http://business.financialpost.com/2014/09/23/cras-incentive-based-whistleblower-program-draws-more-than-1000-calls/
Wonder how many of the nearly 100 active cases involve aggressive tax avoidance via Barbados
Canada is a LOWer Tax Jurisdiction just like Barbados. The only difference is Barbados is lower than Canada. The USA concurs.
However expect some ” spin / diplomacy” as the allies are at war.
http://www.nationnews.com/articles/view/behind-the-headlines-a-battle-over-corporate-taxes/
Barbados – Jamaica
Mascoll – Hyman
Barbadostoday online. bottom of pages 4 & 5
Minister McLean signs off a double taxation treaty with the UAE.
http://gulfnews.com/business/economy/uae-barbados-sign-agreement-1.1390221
mmmmm.
http://en.wikipedia.org/wiki/Taxation_in_the_United_Arab_Emirates
David did you read about the exchange between Mascoll and Hyman ?
@Hants
There was no exchange, Mascoll made an assertion and Hyman countered 🙂
http://barbadosunderground.files.wordpress.com/2014/09/mascoll.png
Yes David. Hyman countered a “low blow” with an upper cut.
Just another arrogant Jamaican. Remember no one dares to cried down or criticise Jamaica.
Prodigal son;
The newspaper report absolutely suggests that the arrogance was coming from the other direction. It was Mascoll who was arrogant and the Jamaican put him firmly in his place.
@ Hants | September 25, 2014 at 11:05 AM |
Canada is a LOWer Tax Jurisdiction just like Barbados. The only difference is Barbados is lower than Canada.
Yes, Canadian corporate tax rates (27%) are considerably lower than US corporate tax rates (40%).
But to say that Canada is a LOWer Tax Jurisdiction “just like Barbados.” is absurd.
The Government of Canada has worked hard to control/reduce its spending, to enable it to gradually reduce corporation taxes over a period of years to attract multinationals to “do business” in Canada.
Tony Best’s story includes this: “By reducing business taxes we are creating jobs and boosting investment, making Canada one of the best countries in the world to do business,” said Jake Enwright, a spokesman for Canada’s Ministry of Industry.
Creating jobs and boosting investment in Canada refers to multinational companies actually building factories, stores and other physical assets and employing people to carry on business activities that create things and services, process materials and otherwise add value in Canada.
But, with very few exceptions, the Canadian companies with IBCs or ISRLs in Barbados are not carrying on business activities that create things and services, process materials or otherwise add value in Barbados.
Their contribution to Barbados is the 2.5% income tax they pay to GOB on the hundreds of millions (billions?) of profit created by a few lawyers, accountants and bookkeepers in Barbados.
Best said “Canada’s double taxation agreement with Barbados reduces corporate taxes for Canadian firms that are in Barbados and contributes to the island’s attractiveness to Canadian investors and rich individuals.
Hundreds of billions of dollars in corporate profits pass through Barbados largely because of the tax-saving provisions of tax treaty.”
Finally, Best said “… the Obama Administration is gearing up to fight inversions and the companies that use them.
So when the US eliminates or impedes the use of “inversions” by US companies using Canada, Canada will loose those corporation taxes. And Canada will then move to eliminate or impede the use of Offshore domiciles by Canadian companies to reduce the taxes which would otherwise be paid to Canada.
Canada is NOT a LOWer Tax Jurisdiction “just like Barbados.”
And, Barbados can’t afford to ignore what what is going on in Washington and Ottawa..
See Tony Best September 20 column at:
http://www.nationnews.com/articles/view/behind-the-headlines-changing-the-goalposts-on-financial-services/
Here goes this bunch of grossly incompetent jokers blaming the world for their predicament, rather than look at the way they do business.
The most important thing about this OECD confrontation is clear: the OECD is the rich nations’ club, while a series of little Caribbean islands are confronting this beast individually.
It should be OECD versus CARICOM; your collective strength is greater than the sum of individual islands’. Then, if given a deadline to make changes and you missed it, do you expect OECD to reward that? There is another world than the inward-looking Caribbean one. People expect competence; follow the rules.
Barbados is facing the possibility of being blacklisted by the European Union (EU) in another week.
This, as the country is forced to wait until February 2021 to find out if it will be removed from the Organization for Economic Cooperation and Development (OECD) list of jurisdictions partially compliant with the exchange of tax information standard.
Making the disclosure on Wednesday, Minister of International Business Ronald Toppin cried shame
on the EU, saying its action was “heartless”.
However, he gave the assurance that steps were being taken to rid the country of the unfavourable “partially compliant” status, adding that work was constantly being done to make Barbados the jurisdiction of choice for all reputable investors.
“I want to assure you that we have done and are doing everything possible and beyond to ensure that we secure a rating of at least ‘largely compliant’ in the shortest possible time. To this end, we have been engaging with the OECD every two weeks, furnishing them with updated reports on our [the Barbados Revenue Authority and the International Business Unit] progress.
“We expect that this collaboration with the OECD Global Forum will enable us to submit a request for supplementary review by the beginning of December, if not before, and achieve our aim of being delisted from Annex 1 by February 2021,” Toppin told the launch of Global Business Week 2020 which was conducted via Zoom.
Describing the development as “mind-boggling”, Toppin said: “Even with the OECD’s partially compliant rating, Barbados has made great strides to step up from that rating. Indeed, in correspondence from the EU’s Code of Conduct Group in July of this year they acknowledge ‘the progress made in many areas since the last peer review, and welcomed the spirit of cooperation with which Barbados is approaching this’.”
“Further, the European Bank for Reconstruction and Minister of International Business Ronald Toppin Development and the World Bank Group have given Barbados until April 2021 and June 2021, respectively,
to correct the deficiencies and meet the Global Forum’s standard. Yet, as I already indicated, the European Union . . . is proposing to blacklist us shortly,” he added.
The International Business Minister said that based on communications he had received, “they expect this list to be announced by the European Union on October 6”.
“It is an unthinkable act, and all the more so at a time when we, like so many other small developing countries, are trying desperately to cope with the ravages of COVID-19, a global pandemic that is wreaking havoc on our economy. Such heartless action by the European Union at this time could only serve to compound our problems and make a bad situation worse,” he warned.
Barbados was required to implement a number of changes to its tax exchange framework between July 2015 and June 2018 in order to become fully compliant with the OECD’s Global Forum Standard on the exchange of tax information.
The changes did not take place in the stipulated time frame. Instead, the necessary legislative framework was put in place by December of 2019. This did not save the country from getting
a rating of “partially compliant” when the review was completed in March of this year for the July 2015 to June 2018 period.
Ratings include non-compliant, partially compliant, largely compliant and compliant, based on the approximately ten areas assessed.
Toppin said what compounded things for Barbados was the fact that “enough time had not passed between all the revisions and amendments to the legislation and the time of the review by the Global Forum”.
It was due to that partially compliant rating by the OECD that resulted in the EU blacklisting Barbados in May of this year.
“For the European Union, once a jurisdiction receives a partially complaint rating by the OECD, it will be automatically blacklisted by them even if, as in our case, it is just a question of observing us for a period of time to ensure we are effective in our regulation and enforcement of the legislative framework,” explained Toppin.
He said it was made clear that the blacklisting would go ahead, and it would only be when an approval of request for a supplementary review is done at the next meeting in February 2021 that the country would be removed from the list.
Calling on the global business sector to help defend Barbados’ reputation, Toppin said his intention was for the country to be known as “one of the best regulated jurisdictions globally, where we are not business prohibitive, but business facilitative and attracting businesses of substances only”.
He also issued a stern warning to companies who do not want to adhere to Barbados’ laws governing the sector.
“Let me say clearly here, that my Ministry intends to ensure the strictest adherence to the rules and regulations, and will have no hesitation whatsoever to sanction where necessary, as we have already done as recently as suspending a service provider for the month of September. We are too vulnerable not to ensure and enforce the highest standards,” the International Business Minister said…(Quote)
https://barbadostoday.bb/2020/09/30/eu-threatens-to-blacklist-barbados-in-one-week/
So what are the key issues? Why is Bim being blacklisted? What has Bim done to address the issues? Why has teh OECD taken the position that is has?
I would have liked to see these questions being addressed in the “article”? As it stands it is a collection of jumbled quotes from Ronald Toppin with little context.
@Dullard
You didn’t read the media reports? There were a legislative amendments that should have been implemented in the 2015 to 2018 period. This government when it won office in 2018 responded by doing so but it failed the monitor period the OECD required for the same amedment. Therefore Barbados if it passes the observation period without issue will be removed early in 2021.
I see that the ICBL sale is drawing to a close, at a bargain price too. How come a Canadian lifestyle/ rental accommodation company will be taking over? What are our local financial services companies doing? Were they even able to submit bids? Were they interested?
Given that the ICBL shares were bought by the Canadians at a 60% discount to the last trading price (which itself was also probably a sizeable discount to book value) how does affect that affect the NIS?
What valuation were the NIS holding their 4 million ICBL shares on their books? Will the NIS incur loses because of this?
@ David
I have not been following the media reports. All I know about is the reduction in corporate taxes.
Could you explain this, “… it failed the monitor period the OECD required for the same amendment”?
@Dullard
From listening to Minister Toppin, minister responsible- changes in the legislation required by the OECD had to be implemented in the 2015-2018 period and the OECD carved out a period of time to monitor that the changes would have effectively been doing the job. Although the government on winning office rushed to implement a number of amendments to meet OECD requirements, the period the OECD needed to observe the changes in action post implementation was not met.
@ Dullard
You are right. A series of sentimental tosh, that these evil white people are out to get us. There is a lot of truth in that claim, but there is also a massive amount of incompetence. We must loo inward and our ourselves out.
It is like a religious sect; we have so convinced of how clever we are that once someone says we are not then they must be racist. Just a simple walk around Bridgetown, visiting offices, private and government, and one sees the gross incompetence smack in the face, from the brutally long queues in banks, to long delays trying to get even a birth certificate.
Then there is the ragbag of what passes for regulation, most of it not even fit to regulate farm animals at feeding time. But, instead of improving our systems, let us blame Anglo-Saxons, white people, call them what you like.
As to ICBL, just more of the same. Why should a Canadian with little experience come to Barbados and buy an insurance company? Such things make one so angry that one needs to sit down and for a few minutes.
These same idiots, in their shiny suits and nylon shirts, will get jobs with silly titles working for the same people. They will gt their mortgage for over-priced homes, cars on hire-purchase, two holidays a year and all is right with the world.
However, if a black person, in particular a fellow Barbadian, tries to buck the trend, they come out with knives to destroy them. It is the Bajan Condition, a mental disease.
See Kevin Greenidge noting, again, the state of the NIS. How much damage will the icbl markdown cause? The NIS is getting clobbered from both sides of the balance sheet. How long before further taxes to shore up the NIS?
We are waiting for the recent actuarial report.
>
@ Dullard
Kevin Greenidge is not a minister. That report should have been delivered to parliament.
Here is the real reason for more blacklisting. The EU countries need money. A LOT of it. The pandemic has driven the EU economies to the brink, it has been catastrophic.
”“We will now ensure that the debt is repaid by tech giants, tax dodgers, big foreign polluters and others who do benefit from our single market but do not contribute fairly to our prosperity and the protection of our planet,” said French liberal MEP Valerie Hayer, a co-rapporteur on the issue.”
https://uk.reuters.com/article/us-eu-recovery-taxes-parliament/european-parliament-votes-for-new-taxes-in-eu-to-repay-recovery-borrowing-idUKKBN26732U
Minister Toppin may think that the action is mind-boggling. But when you consider it in this light, it is not surprising. They will not stop coming after whatever they can get.
All international business jurisdictions are now at risk, including Cayman, Bermuda and so on. Especially as Britain has left the EU, the British controlled islands will be a target too.
Let us get real, the playing field is not level and it is a game whereby the biggest boy in the playground gets to decide who can play.
Wrong but real.
https://starcomnetwork.net/blog/2020/09/30/barbados-blacklisted-again/
Additionally, see that the prior main issue of tax convergence, that has been addressed and solved by Barbados in ensuring all corporations in Barbados pay the same tax, has now been forgotten and they will hang their hat on something else.
All we heard about for three years was about tax convergence, ad nauseum. Literally. Now, that it has been addressed, probably what they never expected the government to do, they are back again, with something else.
It took them a while to regroup after the government shocked them by addressing tax convergence. But they will simply not stop.
The only thing now is to attract businesses to Barbados, business that does not rely and does not trade in the EU.
So, UK or EU entrepreneurs who deal with Asia, Africa , South America. Asia especially is a huge market and Asia is taking off.
If the business does not originate in the EU and the funds do not flow to the EU, they have no claim to it. Something is better than nothing.
The one issue then remains of correspondent banking, which they will try to restrict. This is where the South America, Africa and the Caribbean need to have their own banking system. To prevent the stranglehold on their money flows.
Then, they can have cross-functionality with Asia. This will open business up for them in so many ways.
But, how many of them have freed their political minds from colonialist ways and will be willing to walk a new path? Also, there may be some who will see the Caribbean as too small to worry about, but that will not solve things for them either. It needs to be a hemisphere-wide approach to succeed.
And yes, Cuba , Venezuela etc should be included. Why should they be excluded? Just like Barbados, Cayman etc will be excluded because of some blacklist? Yet you will also take their bait and thumb your nose at Cuba? No. Do you not see what is happening? Divide and rule use you for what you can give, but there is no principle involved. If they threaten to blacklist because you deal with Cuba… er…you are already blacklisting???
Strength in numbers. ALL for one and one for all. Use your noggin!
@ Crusoe
I am sure you are right in your assessment of the EU, but we are grossly incompetent and we provide never-ending excuses to cover for that incompetence.
It is like a young black man in the UK complaining about stop and search, then walk around with marijuana in his pockets and when arrested complain that young white boys do the same.
Only a couple days ago the British Virgin Island announced plans to introduce a publicly available register of companies, naming all the beneficiaries.
The British Virgin Island have a population of under 40,000, yet have about 950000 registered companies, 23000 of which UK property owners. The incorporation of companies is its biggest revenue earner.
Why can’t we have a public register of companies, with all directors and beneficiaries named with contact details? What is wrong with that?
You do not have t o be a rocket science to realise something must be suspicious when nearly a million companies from all over the world want to register in a set of tiny islands. Is it because of the beer, or rum punches?
People who will do anything for easy money are called prostitutes.
@HA
please…are you inciting @SS to explain what hard work prostitution is. Though I could dagger there is unlikely to be a family story. It is also very dangerous work. The world’s ‘oldest profession’ is not one to be taken lightly.
That aside, the BVI. So a friend of my wife, arranges a socially distanced meeting with the wife’s husband a few months back. They are interested in buying property in Barbados….they have been frequent visitors. He wants to know about the ‘real estate process’. He has all kinds of questions. Sooo finally I tell him “stop. 90% of the properties you are seeking are owned by foreigners. That property is likely the SOLE asset of a corporation in some offshore location. Hence you buy the company. Your lawyer in wherever, will deal with their lawyer in wherever, and you will buy a corporation in ‘Ruritania’ which will provide you the use of the property it owns in Barbados”. Lights suddenly go on. ‘Oh’ he says, that makes sense. And that is exactly how it went down, once they found a place. As far as the local authorities know, the property of legal description X, has been owned by Infinite Holdings of Ruritania for the past 15 years, and will be continued to be owned by Infinite for the foreseeable future. Infinite pays the annual taxes and other costs associated. Any rental income, if any, is paid to Infinite. And it files annual tax returns in Ruritania.
The blacklist is a joke. Those making the decisions are in all likelihood users of the same transactions they are ‘supposedly’ trying to deter. It makes for good media at home.
@ Northern Observer,
You know and I know that financial services and its regulation in Barbados is a joke. The challenge is to convince Barbadians in Barbados, especially the politicians, that is is seriously flawed.
They prefer to satisfy themselves that they are victims of racism, in that case they do not have to look at their own incompetence and there is always the BU regulars to join in the chorus.
All they have to do is outlaw corporations from owning residential property, and establish a public record of the beneficiaries of all properties and corporations, including the final named person.
If you want to compete, do so with a clean fiscal fight.