Thu | Nov 15, 2018

St Lucia eyes tax reform after EU blacklisting

Published:Wednesday | December 13, 2017 | 12:00 AM

The St Lucia government says it will soon introduce new tax reform measures after the island was included among 17 countries worldwide on a new global list of tax havens by the European Union.

Minister of Finance Ubaldus Raymond said the new tax rules are likely to be unveiled in the new budget. He denied that the island is a tax haven.

Raymond said that Castries has complied with all the requirements of international regulatory institutions, and that Prime Minister Allen Chastanet signed the automatic exchange of information in November 2016.

He said the main outstanding issue involves the harmonisation of taxes, which St Lucia is currently working to improve.

"St Lucia and other countries that were blacklisted, I want to make it clear, these were not institutions dodging the agreement or the requirements of these international institutions but it had more to do with the imbalance in the tax regime," said the finance minister.

"Fortunately for St Lucia, our government, the prime minister, minister of finance, we have already been engaging our local departments Ministry of Finance, Inland Revenue Department in working on a more harmonised tax system."

Raymond said St Lucia is hoping to be off the European Union tax haven blacklist "very soon", even while noting the island is still awaiting official notification of the blacklisting from the EU.

"I can say safely, and very confidently, it will not take long before we are off that list because we are already, as a government, thinking in line of harmonised tax system," he said.

St Lucia is among four Caricom countries named last week Tuesday on the new list of global tax havens, the others being Barbados, Grenada and Trinidad & Tobago.

EU finance ministers said the new list was drawn up after 10 months of investigations by EU officials.

They said the countries on the blacklist were not doing enough to crack down on offshore avoidance schemes. Potential sanctions that could be enforced on members of the list are expected to be agreed in the coming weeks.

The EU said that as a first step, a letter will be sent to all jurisdictions on the new list, explaining the decision and what they can do to be delisted.

The other Caribbean islands listed as tax havens have also denounced the EU position and called for their removal as soon as possible.