News
“Bite greater than the Bark” says Deputy Premier as TCI put on Grey List
By Deandrea Hamilton & Dana Malcolm
Editorial Staff
#TurksandCaicos, March 22, 2022 – The Turks and Caicos Islands is back on the EU Grey List as a non-cooperative tax jurisdiction along with several other Caribbean countries, including two which are in an even more precarious category; the black list.
E. Jay Saunders, the TCI’s Deputy Premier said however, this is an unfair characterization when he made the reveal last week about the listing in the House of Assembly.
“What happens when a country is on put on the list of Non-Cooperative jurisdictions Mr. Speaker? Well according to the European Council website, its member states “will act together to put pressure for reform”. Mr. Speaker, as I am sure you’re aware, this is one of those rare times when the bite is greater than the bark,” said the Minister in parliament.
He also acknowledged that the list is not a desirable place for any country and has vowed to get the Turks and Caicos out the unfavourable category.
“Mr. Speaker, as the guardian of the financial services sector, I am pleased to say to the people of the Turks & Caicos Islands, especially those who work in financial services, that one country that is not on the list is the Turks & Caicos Islands. Mr. Speaker, jurisdictions that do not yet comply with all the EU international tax standards, but have committed to reform, are included in a state of play document (Annex II). This is the list that the Turks & Caicos Islands is currently on, and I’m happy to say that once a jurisdiction meets all its commitments, it is removed from the annexes, and this is what we’re aiming to achieve.”
The ‘EU list of non-cooperative jurisdictions for tax purposes’ identifies non-EU countries that “encourage abusive tax practices which erodes member states corporate tax revenues.
According to several published reports, the Turks and Caicos has not ‘remedied failures of meeting one or more of the requisite standards within a specific timeline’ landing them on Annex ll of the list.
The KPMG report on February 28th confirmed that The Bahamas, TCI and others were added to this list since February 4.
The Turks and Caicos was last gray listed in May 2018 for ‘the existence of tax regimes that facilitate offshore structures which attract profits without real economic activity. The situation was then rectified in 2019 by former Premier and Finance Minister, Sharlene Robinson who, in a statement said she had worked with stakeholders to avoid this negative listing and country was removed.
Now the TCI is back to this unattractive place for financial services and business practices.
“Mr. Speaker, the EU has a program to address what they deem as “harmful tax practices” by countries. The EU aim is to have countries comply with a set of “objective tax good governance criteria, which include tax transparency, fair taxation and implementation of international standards designed to prevent tax base erosion and profit shifting.”
Mr. Speaker, on the 24 February 2022, the European Council ruled on the revised EU list of Non-Cooperative jurisdictions for tax purposes. Countries on the list are described as encouraging “…abusive tax practices, which erode [EU] member states’ corporate tax revenues”. What happens when a country is on put on the list of Non-Cooperative jurisdictions Mr. Speaker? Well according to the European Council website, its member states “will act together to put pressure for reform”.
The Deputy Premier stopped short of saying the country was on the grey-list, but did offer the assurance that the TCI is committed to reform.
“I want to take this time to congratulate the Ministry of Finance team, particularly Mr. Henry Saunders, Director, Financial Transactions Information Exchange, and his team; and the PS of Finance, Mrs. Athenee Harvey-Basden and her team; who worked very hard to ensure that we met the requirements to be included on Annex II, and who are working very hard for our jurisdiction to be removed from the Annexes altogether.”
Other countries named to the Grey List are: Belize, Bermuda, the British Virgin Islands, Israel, Montserrat, Russia, Tunisia and Vietnam. Trinidad and Tobago and the US Virgin islands have been named as countries with harmful tax practices; these have been ‘Black Listed.’
The Turks and Caicos and other ‘grey-listers’ have until October to shape-up.