The Cayman Islands Government has rejected the inclusion of the territory as one of the main offenders in the new secrecy index published by the Tax Justice Network’s (TJN).
The government is also challenging the methodology used by TJN in reaching its conclusions.
The Tax Justice Network describes itself as an independent, non-politically-aligned global think network with a core mission ‘to change the weather’ on a wide range of issues related to tax, tax havens and financial globalisation.
It publishes a series of reports and commentaries, one of which is an annual tax secrecy index.
Chief Officer in the Cayman Islands Ministry of Financial Services, Dax Basdeo, refutes TJN’s assessment of the territory.
“We do not work in ‘secret’, rather we continue to work cooperatively with tax and law enforcement authorities around the world as is reflected by independent assessments of our regime”, he explained.
Mr Basdeo emphasises that the Cayman Islands' standards of transparency are based upon recognised global standards.
He also questions, what he describes as TJN’s flawed methodology.
“Unfortunately, the TJN’s methodology remains flawed, as does their definition of regulatory standards, which are not recognised by any global standard-setting body.”
On its website, TJN admits to its unconventional approach.
"We challenge conventional wisdom, we relish lively debate, and our work gets media attention. We can quickly take positions on current news and issues, without needing long stakeholder consultation.”
The Cayman Islands Government says it continuously makes enhancements to legislation and regulation “to ensure our transparency and international cooperation frameworks remain in line with evolving global standards.”
It also chides TJN for ignoring that the Cayman Islands meets the global standards.
In questioning TJN’s processes, the government highlights what it says are serious flaws in TJN’s methodology.
“Firstly,” it notes, “TJN’s weighting system penalises countries with successful financial services industries. The index incorrectly equates a country’s success in financial services with secretive banking, anonymous shell company ownership, anonymous real estate ownership or other forms of financial secrecy. That’s not supported by the facts and is not how we operate in the Cayman Islands.”
The Cayman Islands does not permit shell companies, bearer shares or anonymously numbered bank accounts that conceal ownership, the government stresses.
It further points out: “We were also among the first International Financial Centres (IFCs) to commit to public registers of beneficial ownership. That puts us at the forefront of initiatives to enhance tax cooperation and transparency.”
“Secondly,” it notes, “TJN’s assessment criteria are geared toward countries with direct taxation systems. Our public revenue is collected upon transactions, principally on goods, but the TJN’s methodology doesn’t account for this. For example, one of its Key Financial Secrecy Indicators (KFSI) isn’t applied to jurisdictions with indirect taxation, and so TJN arbitrarily ascribes a full secrecy score to Cayman.”
The government explains that it has a close working relationship with the UK's National Crime Agency and shares information with countries around the world so that tax administrations can pursue individuals or entities if they fail to pay the full amount of the taxes they owe to their home countries.”
It also admonishes TJN for ignoring “the significant legislative and regulatory enhancements that the Cayman Islands has made.”
The Cayman Islands government says, in line with evolving global standards, it has adopted a number of new laws that support tax transparency and even greater cooperation with international partners.
14 Sep, 2021
07 Sep, 2021
15 Sep, 2021