Caribbean Banks support passage of tax bill amendments

THE Caribbean Association of Banks (CAB) has joined the growing list of advocates for the expedited passage of urgent legislation to strengthen this country’s international tax compliance.

“Non-compliance with Global Forum Standards and Financial Action Task Force (FATF) recommendations increases the sovereign risk profile of not only the jurisdiction (TT) but the region as a whole and threatens a resurgence in de-risking and blacklisting, consequences the region can ill afford,” said CAB in a media release.

CAB “strongly encourages” Caribbean countries that have not yet done so to ensure that they are compliant with international automatic exchange of information/exchange of information on request (AEOI/EOIR) tax standards in order to avoid the negative consequences of non-compliance.

“CAB fully supports the Bankers Association’s (BATT) efforts to have its Parliament enact the necessary legislation for compliance. “As highlighted by BATT, failure to pass this legislation could disrupt the smooth flow of correspondent banking relationships between domestic banks and our international correspondents.”

While CAB commended efforts in the region to meet international standards to to combat tax avoidance/evasion and money laundering and terrorist financing, it “remains concerned” about Caribbean countries that have not implemented these standards. “The delay in compliance exacerbates the negative perception of the region as a ‘tax haven’ and impacts the ability of banks to conduct business globally,” CAB said.

Another business group, the European Business Chamber of TT (EuroChamTT) is also monitoring TT’s moves to compliance, pointing out in a statement on Monday that the Income Tax (Amendment) Bill one of three pieces of legislation that need to be passed to ensure this country meets international requirements. The other two are the Mutual Administrative Assistance in Tax Matters Bill 2018 and the Tax Information Exchange Agreements Bill 2018.

“EuroChamTT is concerned about the impact of TT’s further non-compliance and is urging the Government and Opposition to treat the matter with urgency,” the group said.

The government has claimed that the legislation needs to be passed by the end of November or else TT could face serious repercussions, including loss of correspondent banking relationships. It has not been clear on who set that deadline. However, the Organisation for Economic Co-operation and Development (OECD), which administers the Global Forum on Transparency and Exchange of Information for tax purposes peer review visit is scheduled for January 2019, and the EU, which lists TT as a tax haven, has given countries—including this one—until December 31 to show precise steps and time frames that it will consider when reviewing its list of non-cooperative jurisdictions.