Challenges On The Horizon For Barbados, Warns PwC Tax Partner

by Mike Godfrey, Tax-News.com, Washington

13 December 2002

Speaking at a news conference hosted by the Barbados Investment and Development Corporation (BIDC) this week, PricewaterhouseCoopers US International Tax Services partner, Paul Tadros warned of the challenges ahead for the jurisdiction's finance centre.

Although Barbados has managed to secure removal from the OECD's harmful tax practices list, Mr Tadros warned that the multilateral organisation has resorted to stealth in order to achieve its ends:

'What the OECD could not do directly it is actually going through the back door to achieve it simply by having its members change their laws,' he told reporters, pointing to recent legislative changes in countries such as Chile, Mexico, Argentina and Brazil which are likely to severely limit transactions which take place with perceived tax havens, such as Barbados.

He went on to add that although the country had been 'lucky' to have its name removed from the United States' Homeland Security Bill, 'every single state in the US' considers Barbados to be a tax haven.

However, he stressed that although there will be obstacles to overcome in terms of the international community's perception of Barbados, infrastructure improvements and increased innovation will lead the jurisdiction to success:

'The way it can be achieved is by all participants in Barbados actually participating and coming up with innovations,' he told the press conference, adding that: 'Your competition is not the Cayman Islands, it's not Bermuda, it's not [the] Bahamas, it's places like Mauritius, Hungary, Spain, Luxembourg, Switzerland - the list goes on.'

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