Barbados and smaller economies in the region and elsewhere are “under attack” by the world’s rich countries, which use agencies such as the World Trade Organization (WTO) and the Organization for Economic Cooperation and Development (OECD) to do “some harm to us”, according to one Government senator.
Speaking in the Senate yesterday on the Fiscal Incentives (Repeal) Bill, Rawdon Adams complained about some of the regulations imposed on small countries by the global regulator of international trade and the OECD, the grouping of rich countries.
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Rawdon Adams[/caption]
Like the House before it, the Senate yesterday passed the bill to repeal the Fiscal Incentives Act in order to comply with WTO rules, after the 124-member intergovernmental organization said it violated international trade regulations.
Among other objectives, the Act provided exemptions and tax waivers to encourage manufacturing here.
Although he supported the repeal Bill, Adams said he had done so with a degree of aggrievedness and bitterness, arguing that the WTO and the OECD had been using the controversial blacklist to beat small countries into submission in favour of multinational corporations.
“Repealing this Act is one data point in a long trend that has been attacking a set of policies we have used to promote growth,” he said.
“I think it is worth putting on record in this Chamber that for all the good they [WTO and OECD] may do in other places, they have done and are doing some harm to us with a very blunt instrument they have wielded for 25 years,” he charged.
Referring to a 2015 agreement between Barbados and the OECD on tax matters, Adams said the intent was “to sort of dismantle any sort of tax competition that threatens the countries of the OECD and the EU”.
He added that the OECD’s base erosion and profit shifting (BEPS) framework was a means by which to “take away any tool a small country like ours, with limited resources and no great political power, might employ to diversify its economy away from what I call the tyranny of monoculture”.
The OECD refers to BEPS as tax avoidance strategies that exploit gaps and mismatches in tax rules to artificially shift profits to low or no-tax jurisdictions.
However, some academics say the leading corporate tax havens, who are the largest global BEPS hubs, use OECD-whitelisted tax structures and OECD-compliant BEPS tools.
Meantime, Opposition Senator Crystal Drakes argued that WTO agreements were usually disadvantageous to small economies, recalling that the region’s banana and sugar industries suffered as a result of some WTO rules over the years.
“So when you have small industries like Barbados and small producers they are at a complete disadvantage when you look at the global market and the things that are allowed under the WTO regulations,” she said, adding that the WTO rules favoured multinational corporations.
In piloting the Bill Minister of Foreign Affairs and Foreign Trade Senator Dr Jerome Walcott said the Fiscal Incentives Act had helped place Barbados on the European Union (EU)blacklist past.
He said the EU was concerned about the section of the Act that provides for the minister to determine who would get certain tax incentives. (MM)
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