Tax justice seminar: Transnational corporations must pay their fair share PSI in the Caribbean – Tax justice, the tax haven issue and trade union action Presented by Sandra Massiah, PSI in the Caribbean PSI-FES Project Workshop Buenos Aires, Argentina November 9 – 10, 2015

About the sub-region 23 affiliates in 20 countries and territories Populations 5,000 Montserrat 10,000 – 30,000 Caribbean Netherlands Anguilla 30,000 – 50,000 Sint Maarten, Turks & Caicos Islands, British Virgin Islands 50,000 – 100,000 St Vincent & the Grenadines, Antigua & Barbuda, Dominica, Cayman Islands, St Kitts- Nevis 100,000 – 200,000 Curaçao, Grenada, St Lucia, Aruba, US Virgin Islands 200,000 – 500,000 Guadeloupe, Martinique, Bahamas, Barbados, 500,000 – 1 million Suriname and Guyana 1.3 million Trinidad & Tobago 2.7 million Jamaica 10.7 million Haïti

About the sub-region Multiple languages ( French, Dutch, English, Papiamento, Haitian Creole, Spanish ) Government – parliamentary democracies and republics, including – Independent countries – British Overseas Territories – Countries in the Kingdom of the Netherlands Economies – Small, open – Highly vulnerable to external shocks – ‘Natural’ disasters and other climate change factors are major threats to growth and sustainability

Tax justice: growth and development in the Caribbean Tax justice is one aspect of the on-going conversation on development, high debt, growth and sustainability of Caribbean economies: – Personal income tax – Corporate income tax – Tax reform – Financial services sector – Tax havens

Tax policies across the Caribbean Include combinations of: – Personal income tax – Corporate income tax – Consumption tax – Property tax – Small tax payers – Import tariffs

Importance of taxation in the Caribbean 3 main sources of revenue – taxation of capital, including physical capital and financial capital – taxation of labour – taxation on consumption Caribbean countries were always heavily dependent on taxes from customs duties (especially Antigua & Barbuda, Bahamas, Bermuda) With liberalisation of trade, this revenue declined substantially Taxation on income and profits has now become important in resource-based economies such as Trinidad & Tobago and Guyana In service-based countries there is an increase in taxation of goods and services (introduction of VAT in a number of economies – VAT and sales taxes have been introduced to make up for shortfall in revenue from customs duties

Income Tax Varied income tax regimes throughout the sub-region – Some countries do not levy taxes on personal income (Anguilla, Bahamas, Cayman Islands, Bermuda, St Kitts- Nevis) – Others levy taxes depending on residency status – In some there are flat rates (Belize, Jamaica – 25%) – In others rates vary according to income levels - progressive

Value Added Tax (VAT) revenue Introduced in a number of countries to replace revenue lost from customs and import duties Rate (%) % of GDP Barbados Trinidad % Tobago156 Jamaica16.58 Haïti104

Total tax revenue as % of GDP Suriname32 Trinidad & Tobago29 Barbados27 Curaçao26 Dominica24 Jamaica, Belize23 St Vincent & the Grenadines, Guyana, Anguilla22 St Lucia, St Kitts-Nevis21 Grenada, Antigua & Barbuda, Sint Maarten18 Bahamas16 Haiti13

Tax havens Characteristics of tax havens – Nil or only nominal taxes on individuals or businesses. – Protection of personal financial information. – Lack of transparency. Many lists of tax havens Most comprehensive seems to be the one from the Tax Justice Network

“Tax havens” in the Caribbean

Caribbean Financial Action Task Force (CFATF) Comprises 27 jurisdictions* of the Caribbean Basin which have agreed to implement the international standards for – Anti-money Laundering – Combating the Financing of Terrorism (AML/CFT) – Financial Action Task Force Recommendations (FATF Recommendations) – Secretariat is in Port of Spain, T&T * Anguilla, Antigua & Barbuda, Aruba, Bahamas, Barbados, Belize, Bermuda, Cayman Islands, Curaçao, Dominica, Dominican Republic, El Salvador, Guyana, Grenada, Guatemala, Haiti, Jamaica, Montserrat, Sint Maarten, St Lucia, St Kitts-Nevis, St Vincent & the Grenadines, Suriname, Trinidad & Tobago, Venezuela, Virgin Islands

Views on tax haven status “They’re always moving the goal post” “These are attacks on our country, trying to ruin our reputations globally” “Well we certainly don’t see any of the money that they’re talking about” “Why don’t they talk about the big countries that are tax havens? Why always focus on the Caribbean?”

Action by affiliates Participation in national consultations in many Caribbean countries on fiscal reform including reform of taxation Some PSI affiliates in CARICOM countries have been invited to be part of the CARICOM Task Force on government procurement (NUPW Barbados) Participated in Funding Democracy summit held in Ottawa, Canada in June 2015 Make connections with CFATF

Linking with other GUFs There are some large companies and groups of companies owned by Caribbean nationals that have transnational reach (financial services, oil and by-products, Initial contact with UNI representative in the Caribbean to investigate/learn more about these companies and their record in paying taxes – Not very responsive

Priorities, future plans Nominated a representative from affiliate in Belize to serve on a Funding Democracy steering group Further discussions and develop more epecific action plans at 2016 SUBRAC Engage with CARICOM Secretariat on the issue of taxation, tax havens and related issues at 2016 SUBRAC

Political issues/themes – yes; but technical knowledge is also important Some technical assistance is available within the sub-region Need to do some studies – similar to those done by PSIRU Need to develop the skills that will allow affiliates to better engage in discussions and consultations Focus on women and young workers to develop their skills and capacity

Actions for 2015/2016 Sub-regional working group on Tax Justice and related issues (whistle blowing, anti-corruption) – Focus countries – Develop skills and competencies of working group members Continue to build awareness Educate Establish and build alliances – Other unions and national centres – Civil society partners (especially universities)

Proposed Actions for 2015/2016 Need to have studies on selected countries, with concrete info Representation in Funding Democracy Steering group – initiated by PSI affiliate in Canada Special discussion at 2016 SUBRAC Engage with CARICOM Secretariat on the issue of taxation, tax havens and related issues at 2016 SUBRAC