Richards accuses Oxfam of ‘serial errors’
Finance minister Bob Richards has expressed dismay at Oxfam’s claim that Bermuda is the world’s worst corporate tax haven.
And the Progressive Labour Party joined him to condemn the report as “extremely disappointing”.
Mr Richards pointed to “serial errors” in the global charity’s report on offshore centres, which found that multinational companies reported $80 billion in profits on the island in 2012.
He said the report’s ranking system — which showed US multinationals reported higher profits in Bermuda than they did in Japan, China, Germany and France combined — was based wholly on volume of assets, ignoring Bermuda’s good record on transparency and compliance. He argued Bermuda is fully committed to all Organisation for Economic Co-operation and Development and other global initiatives, and scores “extremely well on all internationally recognised tables”.
“Oxfam, directly and indirectly, appears simply to have ignored Bermuda’s internationally recognised role as a centre of corporate and tax transparency and compliance, a key ally in the fight against money laundering and all criminal activities, and a committed partner in the initiatives of the OECD on tax reform under the BEPs initiative,” Mr Richards stated.
“We have benefited in recent years from a flight to quality, as companies have begun to respond to global transparency initiatives.”
He rebutted a number of assertions made by Oxfam about Bermuda, stating:
• Ranking of jurisdictions based wholly on volume of assets, not on any recognised criteria of transparency or compliance, on which measures Bermuda always scores very well. It should be emphasised too that the right to set a corporate tax rate is recognised by the UN as a sovereign right and is considered by Bermuda to be an essential contributor to its world-leading reinsurance centre, along with political stability, regulatory excellence and geographic independence.
• Anonymous shell corporations. These simply do not exist on the island, nor elsewhere in relation to corporations registered in Bermuda where continually updated beneficial ownership information is fully available to relevant international authorities on request, which is a leading position on disclosure by all international standards. In fact, Bermuda’s register has been in existence for 70 years.
• Failure to co-operate with international process to combat tax avoidance and transparency. Bermuda is fully committed to all of the relevant OECD and other global initiatives, including on Base Erosion and Profit Shifting, and scores extremely well on all internationally recognised tables. Until recently, it was the only Overseas Territory or Crown Dependency to have signed up to the country-by-country reporting standards. The island is barely mentioned in the Panama papers for instance, and ranks better than the UK and the US in the Tax Justice Network’s Financial Secrecy Index.
Senator Kim Wilkerson, the Shadow Minister of Economic Development, said in a statement: “It is extremely disappointing that Oxfam would release such an alarmingly under-researched report. Nowhere in the 46-page report is there an explanation as to how the researchers applied their ranking criteria to Bermuda.
“It is evident that it could not have been applied appropriately because one criterion examines the lack of cooperation with international efforts against tax avoidance. Considering this, it is alarming that the 43 Tax Information Exchange Agreements that Bermuda has entered into with other jurisdictions have been completely excluded from the review.”
Ms Wilkerson said she would support the efforts of the Bermuda Government and the Bermuda Business Development Agency in protecting the reputation of the island.