Barbados is being unfairly labelled as a tax haven, Prime Minister Freundel Stuart said last weekend while in Toronto for the sixth annual Errol Barrow memorial dinner organized by the Democratic Labour Party’s (DLP) Canadian chapter.
Last April, the Washington-based International Consortium of Investigative Journalists revealed that it received an unprecedented leak of documents containing financial information from about 120,000 offshore bank accounts, including 450 held by Canadian residents.
Dennis Howlett, executive director of the lobby group, Canadians for Tax Fairness, said the top tax havens for Canadians include Barbados. His group estimates Canada is losing $7-$10 billion a year to tax evasion.
Stuart said Barbados, which has a double tax treaty with Canada that was signed in 1989, is a low tax jurisdiction and very clear domicile with effective and transparent regulatory mechanisms.
“The entire international and business financial services sector is premised on the perception of investors that they should invest where it’s most beneficial to them tax wise,” Stuart said at a press conference last Saturday. “The international business sector has evolved on that understanding.
“When we get in our jurisdictions and boast how well our international business and financial sectors are doing, we overlook the fact that our gain is somebody else’s loss. On-shore countries like Canada, the United States and the United Kingdom are prepared to listen to our boast without taking any action as long as their own economies are doing as well as they want them to do.
“It just happens that, at this time, the world is going through its worst crisis in 100 years and countries great and small, rich and poor are feeling the effects of that crisis. So it has forced some of the on-shore jurisdictions to look inward and to see where the haemorrhage from their revenues is taking place. Frankly, the off- shore sector has been an easy target and Barbados and other off-shore jurisdictions have had to be constantly defending themselves against the attribution of unflattering labels like being a ‘tax haven’. The slander continues and we have tried to meet these accusations head-on and try to protect our reputation.”
Stuart addressed a wide range of issues, including his government’s decision that Barbadian students pursuing first degrees at the University of the West Indies will have to make a monetary contribution to their post-secondary education.
“Barbadian students have been paying for the cost of their Master’s and other undergraduate degrees,” he said. “What the policy that has been attracting attention relates to are persons doing their first undergraduate degree. What we are basically saying is that if it costs a student $100 to do their undergrad degree, that cost is divided into economic costs and tuition fees. We looked at both of them and it turned out that the economic costs were four times as much as the tuition fees. We have taken a decision that the government will carry the bulk of the costs and pay $80 out of that $100 and ask the student to come up with just the $20 to his or her own education.
“We have also made it very clear that we will be putting mechanisms in place that provides students with access to student loans through our Student Revolving Loan Fund (SRLF) which, by its very existence, should indicate that the Barbados government never contemplated there would be any circumstances under which students wouldn’t have to borrow money for their education.”
Stuart, who accessed the SRLF to attend the Hugh Wooding Law School, said the government would welcome scholarships from nationals or associations in Canada and the rest of the Diaspora.
“We are still committed to ensuring that we maximize the development of our human capital,” he said. “We believe that the best way to develop that human capital is through the expansion of educational opportunities. If there are means and ways in which we can get more scholarships from the Diaspora and wherever it can be found, we will be quite willing to accept them.”
Just days before coming to Toronto, Stuart was in Trinidad & Tobago for the CARICOM bureau meeting.
He said the regional organization established in 1973 to primarily promote economic integration and co-operation among its members, is alive and well.
“I am not one of them who believe that CARICOM is on its death bed with any death rattle in its throat,” he said. “I think it has been functioning quite effectively. I think the people of the Caribbean today are more closely integrated than at any other time in the region’s history and the mechanisms are working better than at any other period.”
Stuart heads the CARICOM Reparations Commission formed after the region’s leaders, at their meeting last July, agreed to set up a body to explore compensation from Europe for the enslavement and genocide of Africans during the slave trade.
“This is not intended to be diplomacy of protest,” said Stuart who is Barbados’ seventh prime minister. “It will be diplomacy of engagement. It’s recognized that our societies in the region have not benefitted from the slave experience…We are just trying to frame the agreement for a meaningful discussion on the issue to make sure it’s not mishandled.”
This is the third straight year that Stuart has attended the DLP fundraiser that honours the memory of Barrow who co-founded the party, trained with the Royal Air Force in the Maritimes and was conferred with an honorary doctorate of Civil Law by McGill University in 1966, the same year he led his country to independence and became his country’s first prime minister.
He died in 1987 at age 67.
“Barrow imbued us with a sense of national pride and that’s the legacy I value of him,” added Stuart.