CURACAO SHOULD NOT BE BLACKLISTED

Antilles oppose place on list of tax haven  

WILLEMSTAD/WASHINGTON  Together with 33 other islands / countries, the Netherlands Antilles appears on a recent proposed bill by three American senators that want to engage the tax haven abuse (abuse of tax paradises). Via diplomatic channels in Willemstad, The Hague, and Washington, the Antillean government is vigorously protesting against that.

This is the so-called Levin-Coleman-Obama Stop Tax Haven Abuses Act. The democratic American presidential candidate Barack Obama is among the three senators that introduced the bill. Being mentioned on the list of 34 ‘offshore secrecy jurisdictions’, as the countries in the document are being describes, can have an adverse effect on the financial sector.

As a matter of fact, the Antilles have done everything possible lately, not to be reputed as tax haven. For example, with the New Fiscal Outline (NFR) the entire tax system – especially with regard to the international financial service – is turned. Meanwhile, the Antilles received the hallmark of the European Union (EU) and of the Organization for Economic Co-operation and Development (OECD), acknowledged the former Dutch minister of Finance, Gerrit Zalm (VVD) during a lecture for the Antillean Central Bank.

Secretary of state Alex Rosaria (PNP) of Fiscal Affairs says that the government in Willemstad is doing everything possible via diplomatic channels to get the name of the Antilles removed from this list. “The law is not enacted yet, but we also do not want this to assume a life of its own.” He points out that the United States has recently ratified the treaty in connection with exchanging tax information. Meanwhile, Rosaria has contact with the American consulate-general in Curacao, Robert Sorenson, about this and says that Finance and Foreign Affairs in The Hague are aware of this and that minister Plenipotentiary Norberto Ribeiro at the Dutch embassy in Washington is brought in.

Also Aruba appears on the challenged list. It’s not clear yet what this island is going to do against this. The US-senators write in an elucidation that the 34 jurisdictions were taken from the American tax service, IRS that identifies these countries as possible locations for evasion of American taxes.

Source: AMIGOE (28 April 2007)

Comment: I have no problem with the US enacting legislation to prevent tax abuse by US citizens and corporations. But there is no reason to attack fully legitimate jurisdictions like the Netherlands Antilles. By the way, the senators seem to forget that the USA itself is a tax haven – also by OECD standards (which helped attract more than $5 trillion of passive investment to the U.S. economy) – for many people and corporations (for an example click here or here).

Also, according to a recent study low-tax jurisdictions promote global economic growth. The study presents evidence that so-called tax havens provide a tax-efficient platform for cross-border investment, help boost capital formation, and also encourage pro-growth tax policies in non-tax haven countries – all of which boost economic performance. The paper also points out that the United States is the world’s largest beneficiary of tax havens and tax competition, both because the U.S. is a tax haven for foreigners and because tax havens facilitate the flow of capital to the American economy (for the paper click here).

Karel Frielink

Leave a Reply

You must be logged in to post a comment.