Tax Justice Seminar: Transnational Corporations and Caribbean Tax Challenges
This content explores the pressing issue of tax justice in the Caribbean region, focusing on the fair contribution of transnational corporations. It delves into the complexities of tax policies, revenue sources, and the importance of taxation in the development of Caribbean economies. The seminar sheds light on ensuring a level playing field for all stakeholders and fostering sustainable growth in the region.
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Presentation Transcript
Tax justice seminar: Transnational corporations must pay their fair share PSI in the Caribbean Tax justice, the tax haven issue and trade union action Presented by Sandra Massiah, PSI in the Caribbean PSI-FES Project Workshop Buenos Aires, Argentina November 9 10, 2015
About the sub-region 23 affiliates in 20 countries and territories Populations 5,000 Montserrat Caribbean Netherlands Anguilla 10,000 30,000 30,000 50,000 Sint Maarten, Turks & Caicos Islands, British Virgin Islands 50,000 100,000 St Vincent & the Grenadines, Antigua & Barbuda, Dominica, Cayman Islands, St Kitts- Nevis 500,000 1 million Suriname and Guyana 10.7 million Ha ti 100,000 200,000 Cura ao, Grenada, St Lucia, Aruba, US Virgin Islands 200,000 500,000 Guadeloupe, Martinique, Bahamas, Barbados, 1.3 million Trinidad & Tobago 2.7 million Jamaica
About the sub-region Multiple languages (French, Dutch, English, Papiamento, Haitian Creole, Spanish) Government parliamentary democracies and republics, including Independent countries British Overseas Territories Countries in the Kingdom of the Netherlands Economies Small, open Highly vulnerable to external shocks Natural disasters and other climate change factors are major threats to growth and sustainability
Tax justice: growth and development in the Caribbean Tax justice is one aspect of the on-going conversation on development, high debt, growth and sustainability of Caribbean economies: Personal income tax Corporate income tax Tax reform Financial services sector Tax havens
Tax policies across the Caribbean Include combinations of: Personal income tax Corporate income tax Consumption tax Property tax Small tax payers Import tariffs
Importance of taxation in the Caribbean 3 main sources of revenue taxation of capital, including physical capital and financial capital taxation of labour taxation on consumption Caribbean countries were always heavily dependent on taxes from customs duties (especially Antigua & Barbuda, Bahamas, Bermuda) With liberalisation of trade, this revenue declined substantially Taxation on income and profits has now become important in resource-based economies such as Trinidad & Tobago and Guyana In service-based countries there is an increase in taxation of goods and services (introduction of VAT in a number of economies VAT and sales taxes have been introduced to make up for shortfall in revenue from customs duties
Income Tax Varied income tax regimes throughout the sub-region Some countries do not levy taxes on personal income (Anguilla, Bahamas, Cayman Islands, Bermuda, St Kitts- Nevis) Others levy taxes depending on residency status In some there are flat rates (Belize, Jamaica 25%) In others rates vary according to income levels - progressive
Value Added Tax (VAT) revenue Introduced in a number of countries to replace revenue lost from customs and import duties Rate (%) 17.5 % of GDP Barbados 10 Trinidad % Tobago Jamaica 15 6 8 16.5 Ha ti 10 4
Total tax revenue as % of GDP Suriname 32 Trinidad & Tobago 29 Barbados 27 Cura ao 26 Dominica 24 Jamaica, Belize 23 St Vincent & the Grenadines, Guyana, Anguilla 22 St Lucia, St Kitts-Nevis 21 Grenada, Antigua & Barbuda, Sint Maarten 18 Bahamas 16 Haiti 13
Tax havens Characteristics of tax havens Nil or only nominal taxes on individuals or businesses. Protection of personal financial information. Lack of transparency. Many lists of tax havens Most comprehensive seems to be the one from the Tax Justice Network
Tax havens in the Caribbean FSI 2013 - FINAL RESULTS FSI-Value4 Secrecy Score5 Global Scale Weight6 RANK Jurisdiction Cayman Islands1,2 Bermuda1 British Virgin Islands1,2 Barbados Bahamas1 Belize Aruba2 Curacao2 US Virgin Islands Anguilla1 St Vincent & the Grenadines1 Turks & Caicos Islands1 St Lucia1 Antigua & Barbuda1 Grenada1 Dominica1 St Kitts & Nevis1 Montserrat1 4 1,233.6 70 4.694 14 432.4 80 0.061 20 26 385.4 317.5 66 81 0.241 0.021 35 52 226.9 129.8 80 80 0.009 0.002 55 113.3 71 0.003 58 59 106.4 102.9 77 69 0.001 0.003 61 96.8 76 0.001 62 85.1 78 0.001 63 81.8 78 0.000 65 66.9 84 0.000 67 60.5 80 0.000 70 55.8 78 0.000 77 26.9 79 0.000 80 18.5 80 0.000 82 74
Caribbean Financial Action Task Force (CFATF) Comprises 27 jurisdictions* of the Caribbean Basin which have agreed to implement the international standards for Anti-money Laundering Combating the Financing of Terrorism (AML/CFT) Financial Action Task Force Recommendations (FATF Recommendations) Secretariat is in Port of Spain, T&T *Anguilla, Antigua & Barbuda, Aruba, Bahamas, Barbados, Belize, Bermuda, Cayman Islands, Cura ao, Dominica, Dominican Republic, El Salvador, Guyana, Grenada, Guatemala, Haiti, Jamaica, Montserrat, Sint Maarten, St Lucia, St Kitts-Nevis, St Vincent & the Grenadines, Suriname, Trinidad & Tobago, Venezuela, Virgin Islands
Views on tax haven status They re always moving the goal post These are attacks on our country, trying to ruin our reputations globally Well we certainly don t see any of the money that they re talking about Why don t they talk about the big countries that are tax havens? Why always focus on the Caribbean?
Action by affiliates Participation in national consultations in many Caribbean countries on fiscal reform including reform of taxation Some PSI affiliates in CARICOM countries have been invited to be part of the CARICOM Task Force on government procurement (NUPW Barbados) Participated in Funding Democracy summit held in Ottawa, Canada in June 2015 Make connections with CFATF
Linking with other GUFs There are some large companies and groups of companies owned by Caribbean nationals that have transnational reach (financial services, oil and by-products, Initial contact with UNI representative in the Caribbean to investigate/learn more about these companies and their record in paying taxes Not very responsive
Priorities, future plans Nominated a representative from affiliate in Belize to serve on a Funding Democracy steering group Further discussions and develop more epecific action plans at 2016 SUBRAC Engage with CARICOM Secretariat on the issue of taxation, tax havens and related issues at 2016 SUBRAC
Political issues/themes yes; but technical knowledge is also important Some technical assistance is available within the sub-region Need to do some studies similar to those done by PSIRU Need to develop the skills that will allow affiliates to better engage in discussions and consultations Focus on women and young workers to develop their skills and capacity
Actions for 2015/2016 Sub-regional working group on Tax Justice and related issues (whistle blowing, anti-corruption) Focus countries Develop skills and competencies of working group members Continue to build awareness Educate Establish and build alliances Other unions and national centres Civil society partners (especially universities)
Proposed Actions for 2015/2016 Need to have studies on selected countries, with concrete info Representation in Funding Democracy Steering group initiated by PSI affiliate in Canada Special discussion at 2016 SUBRAC Engage with CARICOM Secretariat on the issue of taxation, tax havens and related issues at 2016 SUBRAC
