PPM party chair defends rushed tax treaty law

(CNS): Chair of the People’s Progressive Movement, Anton Duckworth (right) has hit back at critics who have said the government rushed through legislation regarding the Tax Information Authority Amendment Bill. While Duckworth agreed the amendments went through the Legislative Assembly at short notice he accuses Tim Ridley (left) one of the major critics of going “over the top.”

In his article The Irony of Politics Ridley drew attention to the lack of debate surrounding what is a very important piece of legislation and said people in the financial services sector were not given any time to scrutinise the changes to the law.

However, Duckworth defended government actions and said that there were good reasons for the speedy enactment and more importantly the amendments are widely supported. He said in the first instance the changes to the bill are technically enabling measures and no surprise to the sector.

“It allows tax information exchange arrangements to be made by this country unilaterally, in a form which we believe will meet OECD standards,” Duckworth said in a statement released before Christmas explaining the need for the amendments and why they were rushed through the house.

He said the recent changes in the global financial situation have seen the OECD turning up the heat on offshore centres and the government was concerned that it might accelerate its timetable.

“This has in fact now happened. The OECD has announced that it will be making its assessment in February.  This is one of the difficulties of addressing the OECD’s requirements.  The goalposts have a tendency to move,” Duckworth said in justification.

He explained that while continuing to look for satisfactory bilateral arrangements, the government needed the ability to establish information arrangements unilaterally.

 “This approach was adopted after discussion with private sector representatives.  And it was explained at a meeting on 4 December attended by numerous financial industry representatives,” he added noting that Ridley was invited to the meeting.

The law may still not be enough however, to protect Cayman from potential blacklisting

“As long as there is the political impetus for this kind of tactic, we must expect that there will be continuing demands, from the OECD and from others, that we are called on to meet in order to avoid being deemed uncooperative,” Duckworth said. “Both the government and the financial industry understand the need to work together, they have been doing so, and I am sure they will continue to do so.  If Tim or anyone else thinks they know a better way, or wants to help, they should let the government know.  If Tim wants to know more sooner he should come to the meetings.”

Duckworth also criticised Ridley for suggestingthe PPM government was not practising what it preaches.

“I think he knows that in the last three and a half years there have been very few occasions on which it has introduced measures on short notice.  It may be recalled that the previous Government did it frequently. This is not an end to public consultation, good governance, or life as we know it in these Blessed Isles,” he said.

The TIEA was passed on 19 December and forms part of government’s strategy to try and address potential onshore threats to the financial sector in the Cayman Islands. The idea is that if Cayman enters into bilateral tax information exchange agreements with countries the quid pro quo is that the countries in question will remove Cayman from blacklists and agree not to discriminate against the jurisdiction. In the past however the negotiations have proved sticky with some international governments not necessarily seeing the quid pro quo benefits. With the global circumstances however things have changed and the OECD is talking tough about identifying uncooperative offshore centres, by reference to the number of tax information exchange arrangements they have.