By: Staff Writer
March 7, 2023
A reputable economist explains that taxation had its roots in Imperial power and was never initially meant to extract money for the state to provide better quality services, but was essentially the first “Imperial age of illicit financial flows.”
Alex Cobham, chief executive of the Tax Justice Network, said on the Tax Blacklists and Propaganda: Defeating the Discrimination and Pro-Poverty Agenda,” panel that this historical back-drop on taxation better explains the current paradigm of the European Union and other global powers wanting to be heavy handed on smaller jurisdictions and forcing them to follow their respective multinational corporations in order to provide for greater taxation and transparency.
Mr Cobham also said: “Every country is losing to these tax abuses and we don’t have rules to discipline them. But where we do, they’re very much filtered through this colonial lens that has a clear racial element and only certain jurisdictions can be targeted, with the effect that we do a great deal of damage to those jurisdictions. But also, it’s completely ineffective, it doesn’t stop the tax abuse, because we’re not able to say, look: The United States is at the top of the financial secrecy index, we should do something about them. We can only go after smaller, weaker territories. So the global scale of the problem is continuing to grow and here we are.”
The European Union (EU) has not let up on Caribbean jurisdictions on their crusade to find and bring to heel what they term as “tax dodgers” and corporations that evade taxes in the EU. The EU has repeatedly threatened Caribbean jurisdictions over the past 20 years with their now infamous “blacklist” that puts non-tax compliant jurisdictions under intense scrutiny and isolation for not being open and transparent on the companies that incorporate and have headquarters in their respective Caribbean jurisdiction.
The Bahamas, British Virgin Islands, the Caymans and Bermuda have always ranked at the top of the EU’s attention to target, despite having complied with most, if not all, of the EU’s demands to implement infrastructure that provides for greater communication and transparency.
Despite the consistent pressure on Caribbean offshore jurisdictions being ineffective, the EU have not changed course and have no sign of doing so any time soon. What’s more telling is that these blacklists that started in 2017 effectively leaves European countries off of the list and this is “telling” about why the lists are in place in the first place and speaks to the greater conversation on discrimination against countries that do not cooperate with the EU on tax compliance.
Steven Dean, professor at Brooklyn Law School, facetiously said that these bullying tactics are working for the EU because they seem to actually protect multinationals from paying taxes altogether. “You do you have a little drama to distract everybody from the fact that nobody’s paying any tax anywhere… but the OECD has been playing a really complicated game of three card monte and everybody is just sitting around dazzled at what they’re doing. But there’s nothing to it because there’s nothing there, so I think it is working very well, but you have to understand what’s the game that’s being played.”