Use Of IFCs Misconceived By G20 Taxpayers

by Ulrika Lomas, Tax-News.com, Brussels

16 June 2010

A survey released last week by Invest Barbados showed that the majority of people in the G20 nations of the US, UK and Canada are opposed to investments in offshore international financial centers with Americans exhibiting the strongest opposition. This opposition changes to overwhelming support once the public are made aware of the benefits of such foreign investment on the home economy, the survey however found.

Among American participants, where initial opposition was strongest, 66% of respondents said they were opposed to US foreign investment in general; however, 81% supported offshore investment when they learned that it can help create jobs at home, and 70% of participants were supportive when they were told of the benefits to domestic tax revenue, revealing broad misconceptions among major G20 nations about the beneficial role of international financial centers in the global economy.

The survey was released in advance of June’s G20 Summit in Toronto where President Obama is expected to address financial reform and global economic cooperation.

"In recent years there has been much rhetoric in several G20 countries against tax havens in a way that stigmatizes legitimate international financial centers," said Darcy Boyce, Minister of State, Finance, Investment, Telecommunications and Energy for Barbados.

"The reality is that well-regulated, transparent tax-treaty based centers, like Barbados, assist in the growth of both American multinationals and their home economy in the long term. At a time when most G20 nations need sustainable stimulus structures, governments should recognize the domestic benefits of legitimate international financial centers."

Recommended