CARICOM CHAIRMAN DR. THE HON. TIMOTHY HARRIS HIGHLIGHTS THE THREATS FACING THE REGION’S FINANCIAL SERVICES
BASSETERRE, St. Kitts, February 27, 2019 (Press Unit in the Office of the Prime Minister) – The labelling of Caribbean countries as non-cooperative tax jurisdictions and its adverse impact on the financial services of small island states were among the burning issues addressed by CARICOM officials during the opening session of the 30th Inter-Sessional Meeting of the Conference of Heads of Government of CARICOM held on Tuesday, February 26.
The blacklisting of small island developing states (SIDS) has long been an issue on the front-burner for countries of the wider CARICOM region.
Chairman of the Caribbean Community and Prime Minister of St. Kitts and Nevis, Dr. the Honourable Timothy Harris, stated in his remarks that the continuous addition of “onerous requirements” to comply with new tax regulations “is tantamount to cruel and unusual punishment.”
“The EU [European Union] and its Member States are going well beyond the regulations and requirements of the OECD [Organisation for Economic Co-operation and Development], of which they are a part, and with which our countries are largely compliant. Further, the selective application of their strictures does not apply to everyone and has a distinct bias,” Prime Minister Harris told his fellow CARICOM Heads of Government.
The St. Kitts and Nevis prime minister said these actions by EU member states raise several alarming questions, such as ‘Why are the revenue earning measures of small states within the Caribbean Community and elsewhere being deliberately targeted?’
In underscoring the threat against the region’s financial services, Dr. Harris stated, “The denial of correspondent banking services affects our tourism sector and indeed our capability to engage in international transactions such as when credit card transactions are delayed, and also affects remittances, a significant financial element in many of our small economies.”
The CARICOM Chairman also used the opportunity to reiterate his call for the international community to address with urgency the sterile measure of the per capita income criterion now employed to determine the graduation of countries.
“Many of us are unable to source concessional development financing having graduated out of access by the use of GDP per capita as the major criterion rather than the more comprehensive vulnerability index,” Dr. Harris stated. “We have to press the case at every level that as the International Monetary Fund (IMF) has recognised, we have significant vulnerabilities that set us apart from other middle-income states.”
In light of this, Prime Minister Harris strongly suggested that vulnerability be the major criterion in determining access to concessional development financing, and urged his CARICOM counterparts to continue their advocacy of this critical point.