Caribbean Author Lambasts OECD

Tax-News.com, London

26 March 2002

Washington-based Center for Freedom and Prosperity Foundation, which has been prominent in the fight against the OECD and other multilateral organisations as they have attempted to rein back fiscal competition from successful offshore jurisdictions, has released a paper entitled, "The Case for International Tax Competition: A Caribbean Perspective."

The paper's author is Carlyle Rogers a native of the Eastern Caribbean island of Anguilla and a post-graduate external research student at the University of London pursuing a master's degree in Corporate and Commercial Law. He is also qualifying as a Solicitor in England and Wales at London's College of Law.

The report finds that one voice is missing in the tax competition/tax harmonization debate. That is the voice of the persecuted jurisdictions, especially the ones targeted by the Organization for Economic Cooperation and Development's proposal to eliminate so-called Harmful Tax Competition. This paper gives voice to the views of those jurisdictions negatively affected by the OECD's fiscal imperialism and discusses the moral, economic, and development implications of tax harmonization proposals such as "information exchange."

The paper says, in part:

'Persecuted low-tax jurisdictions would lose their sovereign right to determine how income is taxed within their borders. Instead, they would be forced to emasculate financial privacy laws so that high-tax nations can impose their oppressive tax burdens on income earned in low-tax economies. The high-tax nations are so anxious to prop up their welfare states that they are threatening to impose financial protectionism against so-called tax havens.

'The 40 low-tax jurisdictions targeted by the OECD have certain basic features in common. These include the fact that they are:

• Small independent or non-independent countries or territories, many in the developing world;
• Using financial services as a means to diversify their economic base;
• Predominantly former or current colonies or territories of OECD member countries;
• Not members of the OECD.

'The Paris-based bureaucracy has targeted these jurisdictions in a misguided attempt to imprison an increasingly mobile tax base in order to maintain the inefficient and unproductive welfare states of OECD member nations. The OECD seeks to do this at the expense of poorer developing countries seeking to gain a foothold on the ladder of economic progress. In a globally liberalized world where trade barriers are falling, tax competition is a legitimate strategy for economic development. Not only do sovereign states have a right to use their tax systems to lure foreign investment; they owe a duty to their citizens to use all and every legitimate mean to generate economic activity and growth.'

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