Archive for November 16th, 2010
Cayman Finance chair says UK MPs still don’t get it
(CNS): Following a question asked in the UK parliament last week by an opposition shadow front bench member Anthony Travers has said that he believes that some UK MPs don’t understand the Cayman Islands and are not capable of proper debate on the issues. As a result of a question by Emma Reynolds MP to the new OT minister about why the British coalition government had approved borrowing for Cayman when it had still not introduced direct taxation, Travers has again taken up his pen. “Evidently the level of understanding of the Cayman Islands still demonstrated by some UK MP’S falls far short of the minimum standard required for proper debate in the House,” the Cayman Finance Chair said.
Travers said it was possible that it arises from poor briefing and it was the role of Cayman Finance to assist in improving the level of understanding which was why he had decided to write directly to Reynolds.
On 9 November Emma Reynolds, a member of the shadow foreign affairs team, asked Henry Bellingham why following comments by the Chief Secretary to the Treasury about the unacceptability of tax evasion and a crackdown on those hiding money offshore, the OT minister had abandoned the demands of the previous government for Cayman to give up their tax haven status and introduce some form of direct taxation.
Bellingham told the opposition member that the previous minister, Chris Bryant had approved borrowings of £217 million last year with conditions attached and this year he had approved a further £123 million, with the same conditions. “For the Cayman Islands to get their economy moving again, we strongly feel that they need to maintain their offshore status, and we are following the policy of the previous government,” he said in the UK parliament.
In the wake of this parliamentary question Travers told Reynolds in his correspondence that the question she asked perpetuated fundamental misconceptions concerning the Cayman Islands and said that, “tax evasion is off the table as far as the Cayman Islands is concerned,” in his letter which was copied to Bellingham.
“The Cayman Islands has instituted proactive tax reporting on every bank account with every Treasury Department in the European Union, pursuant to the European Union Savings Directive 2005 with which it fully complies,” he wrote.
He denied that the Cayman Islands was a jurisdiction where individuals or corporations can “hide money” and said that Reynolds may be confusing the Cayman Islands “business model with that which until recently existed in Liechtenstein and Monaco and which to a great extent still exists in Switzerland. “
The Cayman Finance chair said that tax avoidance was lawful but that still had nothing to do with Cayman and said that was down to UK, tax legislation.
He said the “tax neutral platform” in the Cayman Islands for international financing transactions has nothing to do tax evasion.
“Cayman Island entities pay taxes in the jurisdictions where the profits are made in accordance with the laws of those jurisdictions,” he said and said if she was calling Cayman a tax haven because it collects revenues through indirect taxation and not direct then she was correct but that nothing to do with the issue of tax evasion or tax avoidance.
As chair of Cayman Finance Travers has committed to putting pen to paper whenever he believes politicians, columnists or other public figures have misrepresented the jurisdiction. Since taking up the chair of the offshore industry body he has written to a number of British newspapers as well as European members of parliament and members of the United States congress.