BASSETERRE, St. Kitts – RECENT actions by the French government to include St. Kitts-Nevis on its blacklist of “uncooperative tax havens” have been described by Prime Minister and Minister of Finance Hon. Dr. Denzil Douglas as a “premature” and “out of turn” decision.
A decree issued by the government of France earlier this week identified 18 countries located outside of the European Union as “uncooperative” as it relates to the signing of Tax Information Exchange Agreements (TIEAs). Caribbean countries on that list include Anguilla, Belize, Dominica, Grenada, Montserrat, St. Kitts-Nevis, St. Lucia and St Vincent and the Grenadines.
As part of the blacklisting, the government of France will be imposing greater taxes on all domestic companies that have operations in those 18 territories. Taxes in some areas are expected to see a jump from 15 to 50 per cent and tax exemption enjoyed by these companies will be annulled.
The decision has threatened the region’s financial sector and it has not been well-received by PM Douglas.
“We think that France has acted out of turn and it has acted prematurely against the commitment that was made with the OECD countries that March would have been the deadline for any punitive action to be taken,” Douglas said in his February instalment of monthly press conferences yesterday (Feb. 17).
The Federation was similarly placed on a grey list of “secretive tax havens” by the Paris-based Organization for Economic Co-operation and Development (OECD), but was given until March 2010 to sign a minimum of 12 TIEAs to make its way onto the white list – a goal the PM said was certainly achievable.
“We are very confident that with the pace that we have been signing on these agreements and treaties, definitely, the deadline would have been met by this country and so there would not have been any need for the OECD to blacklist St. Kitts and Nevis.
“And that is why it is strange that France alone, of all the member countries of the OECD, acted unilaterally, prematurely and took a position which to a large extent we are still trying to analyze as to the specific reason for this action.
Since talks of OECD ‘grey listing’ hit the nation, the government of St. Kitts- Nevis has reached tax agreements with Monaco, the Netherlands, the Netherlands Antilles, Aruba, Denmark, New Zealand and Liechtenstein. The nation now needs only three additional TIEAs to be signed in order to join Barbados and the USVI on the OECD’s white list.
The Federation has already initialled nine other agreements with six separate Nordic countries, the United Kingdom, Canada and Australia and is waiting for dates for the signing of these agreements to be given to the Federation.
Douglas said that the blacklisting, albeit a strange and premature decision, will not stop the progress made by the government, as he reassured the nation that his government would continue to work to meet the OECD deadline.
A separate statement on the issue including the way forward for the country is expected to be released shortly.
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