The Business Blog – Canadian Newspapers Blast Barbados Offshore Sector

Compiled by Due Diligence
donvilleinniss

Donville Inniss, Minister of Commerce and International Business

The seeds of Canadian corporations hiding billions of dollars in offshore tax havens were sewn more than 40 years ago, after the Canadian government pursued a series of tax treaties with tiny Caribbean and European nations.

The 92 tax treaties now signed with countries such as Barbados, Jamaica and Malta currently translate into billions of dollars moving out of Canada — nearly all tax free. This includes 22 tax information exchange agreements, where the sharing of tax information is intended to weed out evaders – The Star

On June 8, Barbados’ Minister of Industry, International Business, Commerce and Small Business Development, the Honourable Donville Inniss hosted an Invest Barbados  seminar in Toronto with the theme titled: “Supporting Business of Substance”. During the seminar, Minister Inniss addressed the audience on the topic: ‘Welcoming International Business to Barbados’.

More details by accessing the following links:

On June 17 and 18, the Toronto Star ran scathing “Tax Haven” articles prominently featuring Barbados  as one of the counties/jurisdictions used by Canadian companies to avoid paying billions of dollars of income tax to Canada Revenue Agency (CRA), specifically mentioning Gildan and Valeant.

See articles at:

While certainly not the intention of The Star, their articles may have the effect of reinforcing Minister Inniss’ pitch of doing business in Barbados to legally avoid Canadian income tax.

There is an interesting interview of Minister Inniss published on March 10, 2016, at:

Interview with Donville Inniss, minister of industry

Minister Inniss is quoted as saying:

Over time, as we have moved away from an agrarian society and more into a service-based one, we have found ourselves producing more and more products for international business and the financial services sector, to the extent now where it has become the second most important part of the economy. We currently have over 4,000 companies licensed in this particular industry, with 5,000 or so employees, making a five percent contribution to our national economy.

It strikes me that Minister Inniss may be shooting himself in his foot with that statement. 4,000 companies with 5,000 employees.  That is slightly more than 1 employee per company, which would presumably include nominee Directors.Hardly a big employer of Barbadians; other than Directors and tax lawyers and accountants.

Given the mounting pressure in Canada to make Canadian companies pay their “fair share”, Minister Inniss should be honing his negotiation skills, because he is going to have to be at the top of his game, or punching over his weight, when the Canadians come to renegotiate the tax treaties.

BU recently stated:

Is this the same Minister Donville Inniss who today [16 June 2016] invited disgruntled stakeholders to pursue established government channels to solve problems and avoid the traditional and social media?

DD says “Will he Minister Inniss now be inviting disgruntled Canadian taxpayers to avoid reading the Toronto Star?”

Canadian Government Continues to Hunt for Tax-Avoiders

Submitted by Not Taken
Canadian government has Cameco in its sights for $800 million

Canadian government has Cameco in its sights for $800 million – Photo credit: The Globe and Mail

Yet another interesting (scary for Barbados) article – Cameco’s $800-million tax battle. I have been sending these recent articles  as a public service so the Minister of Finance (MOF) and Governor of the Central Bank have a heads up on the attack on Canadian tax evaders/avoiders that is undoubtedly about to hit the Barbados offshore industry; if in fact it has not already hit – but unreported.

This is very bad news for Barbados revenue sources. While the Cameco case involves its Swiss subsidiary, it is probably just the tip of the iceberg in CRA’s efforts to collect taxes due to Canada. There must be hundreds, if not thousands, of  Canadaco (Barbados) Limited businesses doing the same same transfer pricing schemes (scams) in order to pay 2% income tax to Barbados, rather than 27% to Canada.

Even those Canadian companies not not already being audited for this this type of tax “management” may decide for close up shop in Barbados to avoid the publicity that a CRA audit will bring.

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Barbados Left Behind; Where Is The Leadership?

Prime Minister Fruendel Stuart

Many accuse BU of being too negative because there is a heavy focus on what is wrong as we see it. We do reflect sometimes to ask  if such is the case. So far the consensus in the BU household is that we represent an alternative view not often found in traditional media. We will soldier on!

Three events in the news in recent days have reinforced our view that Barbados is like a rudderless ship which lacks clear leadership. This has been the case for the last twenty years which coincidentally straddles DLP and BLP governments.

The first event in the news  was that several government websites were hacked. The Internet is used to facilitate the sharing of information and financial transactions. The lack of a serious reaction to the hacking speaks volumes. The government of Barbados in 2011 is obviously not a serious user of the Internet to facilitate financial transactions. Barbados we are told aspires to be first world which does not accord with the lazy way we have embraced the Internet to facilitate business development. How can we expect to fan entrepreneurial development if the Internet is not used by government to facilitate financial transactions? LIME and Digicel are about to roll out 4G and 3G respectively and for what? No doubt LIME and Digicel will continue to rake in the revenues from recreational activities by a population intoxicated by Facebook, Twitter, streaming videos and texting to the VOB show, ‘the things we do for love’.

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Barbados Not Interested In Being A Tax Haven For The Shady

International Business (IB) is one of our key productive sectors. Successive Barbados governments have supported this sector and it has gone from strength to strength. Recently it was drawn to the attention of Barbados Underground a website which found the time to knock our IB sector. Here is an excerpt from the website which appears to be owned by a Panamanian Law Firm based in Guatemala.

Barbados has a number of Tax Treaties that turn us away from this jurisdiction right off the top. Tax treaties open the door to wholesale fishing expeditions where records are turned over just to see if maybe there was a tax violation.

Often times it is left to BU and a few others to challenge some of the misinformation which is deposited on the Internet. Certainly to be criticised by a law firm out of Panama/Guatemala is a good thing considering the type of business Barbados wants to attract. Based on what we understand from people in the know, Barbados has never built its IB sector using a privacy model.

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