Out of service – Barbados Today

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The European Commission has sought comment on the thorny issue of tax avoidance and its impact on the European Union (EU), but a Barbados-based economist has been quick to criticize European actions against Caribbean financial services centers like Barbados.

Marla Dukharan responded to the invitation from Europeans to comment on her initiative called Tax Evasion and Aggressive Tax Planning in the EU – Tackling the Role of Enablers.

The Trinidadian economist, who lives in Barbados, questioned the EU’s self-proclaimed authority to blacklist sovereign countries over issues related to taxes and enforcement of anti-money laundering standards silver.

In its Sept. 30 submission, Dukharan questioned the EU’s right to tell another country’s government what level of taxes it should apply.

“Doesn’t the EU recognize the sovereign right of countries outside the EU to determine their own fiscal frameworks like those of the EU, such as Ireland and Hungary?

“How is this acceptable for Ireland and Hungary, but not for the developing small non-white former European colonies? »

Furthermore, she criticized the EU for being “unfair” and “selective” in applying its methodology, which she pointed out has also been heavily criticized by the global non-governmental organization OXFAM. in 2017.

On the controversial issue of global anti-money laundering and anti-terrorist financing (AML/CFT) standards, Dukharan told the Europeans in stark terms that they were out of place by giving themselves a authority they did not have.

“The EU is not the global authority on taxation or AML/CFT compliance. This role belongs respectively to the Organization for Economic Co-operation and Development (OECD) and the Financial Action Task Force (FATF). The EU has unilaterally and indefensibly blacklisted countries that the OECD and FATF do not.

“On what basis does the EU believe it has the power to take this action unilaterally, and on what basis does the EU blacklist countries that legitimate global authorities themselves have cleared?” she questioned

In this regard, she criticized the grouping, pointing out that while the Europeans have indicated the adoption of a proportional principle, it has always blacklisted countries which, according to the Parliament of the European Union, represent less than 2 % of global tax revenue losses.

Indeed, in January 2021, the European Parliament, in a press release, said it had adopted a resolution calling for the system used to establish the European list of tax havens to be changed, as it is currently “confusing and inefficient”.

The European Parliament statement called for a change “that would make the process of listing or delisting a country more transparent, consistent and impartial”.

In addition, the parliament recognized the need for further scrutiny of European countries as well.

“EU member states should also be scrutinized to see if they exhibit characteristics of a tax haven, and those at fault should also be considered tax havens,” added the European Parliament.

Dukharan also expressed serious concerns about the data and methodology used by the EU in its blacklisting processes.

She pointed out: “In your blacklisting methodology, you use the International Monetary Fund (IMF) definition of offshore financial center. In 2008, the IMF produced a list of offshore financial centers, but the IMF “has not used or maintained the list of offshore financial centers since. Why would the EU continue to use this abandoned IMF list from 2008 in its framing criteria in 2020? » (IMC1).

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