The inclusion of St. Vincent and the Grenadines (SVG) on a blacklist of tax havens by the European Union is “unfair and unjust” and “plain wrong”, Prime Minister Ralph Gonsalves says.
He told reporters that the blacklisting can result in reputational damage that may time much time and effort to correct.
SVG is among 30 territories that the European Union in June placed on its first list of international tax havens.
The list also includes the Caribbean nation of Anguilla, Antigua and Barbuda, Bahamas, Barbados, Belize, Bermuda, British Virgin Islands, Cayman Islands, Grenada, Montserrat, St Kitts and Nevis, Turks and Caicos, and the U.S. Virgin Islands.
It comes as part of what the European Union describes a crackdown on multinational companies trying to avoid paying tax in the 28-nation bloc.
But Gonsalves told the media on Tuesday that the list is “out of order and completely at variance” with what the Organisation for Economic Co-operation and Development (OECD) has said about this country’s tax regime.
Gonsalves, who is also Minister of Finance, noted that SVG has gone through both peer reviews with “flying colours” and the last one designated the nation as “largely compliant”, adding that this is the status that all compliant states get.
He noted that head of the SVG’s Financial Services Authority, Sharda Bollers, at his request, wrote the Global Forum on Transparency and Exchange of Information for Tax Purposes, secretariat and the director of the Centre for Tax Policy and Administration (CPTA) in relation to the matter.
In his response, Pascal Saint-Amans director of the CTPA said SVG has demonstrated “a continued commitment to cooperation with the international community and implementation of the international standards.
“This is evident by its successful Phase 1 peer review in 2012 and the fact that its Phase 2 peer review report, which was published in October 2014, concluded that St. Vincent and the Grenadines has an overall rating of ‘largely compliant’ with the standard of exchange of information on request.”
“We are not a tax haven, simply put,” Gonsalves said.
“I don’t want to throw words at several of these countries which listed us and other countries in Europe who are not complying with the standards we are complying with. All we are saying is what we are doing,” he said.
Gonsalves said he looks forward to the removal of SVG from the present European Commission blacklisting.”
“This was unfair and unjust,” he said, noting that CARICOM has also written to the European Commission on the matter.
Gonsalves spoke of the negative impact on the country of the blacklisting, saying, “These people do these thing and you are a small country, they smear you for absolutely no reasons and then you have reputational damage you have to correct.
“What they did is plain wrong.”
He said the European Union ambassador to Barbados and the Organisation of Eastern Caribbean States, Mikael Barfod wrote, a letter to the media “basically saying this is not what it is.
“And he was trying to see if he can reduce the extent of any damage. And he was embarrassed and they didn’t like it, but under the rules, if ten countries were to do so, your name comes up on this list.”
Gonsalves said that on this matter, in Europe the left hand doesn’t know what the right is doing.
To illustrate, he said the issue did not come up when he held a bilateral meeting in Brussels last month with Italy’s Foreign Affairs Minister, Paolo Gentiloni, although Italy is one of the countries that says SVG is non-co-operative.