Jude Scott, the CEO of Cayman Finance, the representative body for Cayman’s business community, has slammed the language used by charity Oxfam in a recent report in which it described several domiciles including the Cayman Islands as tax havens.
Scott described the charity as biased and said it was simply regurgitating “misleading rhetoric pretending to be research”.
He continued: “Through their biased ‘analysis’ Oxfam has successfully completed their own ‘race to the bottom ’by circulating intentionally inaccurate and misleading information aimed at advancing their own agenda and harming countries they do not ‘like’ in the process.
“Oxfam’s alarmism is unsupported by the facts. International policymakers continue to recognize the vital role the Cayman Islands plays in the global economy as a premier global financial hub, connecting law-abiding users and providers of investment capital and financing around the world – benefitting both developed and developing countries.
“For example, last year alone, the World Bank’s International Finance Corporation invested more than $400 million in ten different Cayman-based investment vehicles to support critical telecom, energy, agriculture, technology, venture capital and manufacturing development projects in more than 24 developing countries.
“Oxfam continues to use a misleading and overly simplistic definition of what a tax haven is. It’s assertion that a zero tax jurisdiction is a key criterion in defining a tax haven is simply not correct. Cayman Finance believes that any criteria used should be transparent, objective and meaningful.
“A meaningful definition of a ‘tax haven’ is a country that provides shelter for illegal or inappropriate transactions relating to tax. As such a ‘tax haven’ would be a jurisdiction that engages in practices that supports or conceals transactions relating to tax evasion ,which is illegal, and aggressive tax avoidance, which, although legal, in many circles may now be considered to be harmful to economies.
“The Cayman Islands is not a ‘tax haven.’ The Cayman Islands is an efficient and effective tax neutral jurisdiction that does not add additional taxes and has been recognised for decades as a strong partner in combatting global financial crime including money-laundering, terrorism financing, corruption and tax evasion. The Cayman Islands has gained the reputation of a transparent jurisdiction by meeting or exceeding globally-accepted standards for transparency and cross border cooperation.
“The Cayman Islands enables parties from around the world who are domiciled in countries that may have differing laws, regulations, tax rules and customs to benefit from doing business with each other using Cayman as an efficient and effective tax neutral platform.
“In the fight against tax evasion, the Cayman Islands has implemented global standards for best practices for transparency such as US/UK FATCA and being an early adopter of the OECD’s Common Reporting Standard, which provides automatic exchange of tax information with countries around the world.
“Aggressive tax avoidance requires legal mechanisms or treaties, such as double taxation agreements, to be in place between countries to legally transfer tax bases from one country to another to agressively reduce taxes. The Cayman Islands does not have any double taxation agreements or similar arrangements. As such, the Cayman Islands is not a jurisdiction used for aggressive tax avoidance schemes.
“The Cayman Islands adheres to the same high global standards for transparency and cross border cooperation as G20 countries and other top International Financial Centres (IFCs) – together the “G20 Plus”. G20 Plus includes G20 countries plus top IFC’s including the Cayman Islands, Bermuda, Jersey and Guernsey. These G20 Plus IFCs are pivotal in benefitting the global economy by being tremendous extenders of value for G20 economies around the world.
“In a global financial system, a single jurisdiction’s leadership on transparency is not enough. Combatting global financial crime requires a unified legal, social and law enforcement approach by all G20 countries and IFCs together. Cayman Finance hopes all jurisdictions will adopt the full range of globally-accepted standards for transparency and cross border cooperation. As new standards are considered by the G20 Plus, it is critical that they apply equally to all jurisdictions.
“The Cayman Islands attracts investment capital and financing from around the world, which is efficiently and effectively pooled and invested back into opportunities across the globe – often benefitting the citizens of the developing countries that Oxfam purports to speak for.
“Oxfam would benefit from spending its time and resources to properly understand the tremendous value the Cayman Islands provides globally.”
Cayman Finance, Jude Scott, Oxfam, Cayman Islands