Minister points to worrying trend at EU grilling

| 26/04/2016 | 10 Comments
CNS Business

Cayman Islands Financial Services Minister Wayne Panton

(CNS Business): The Cayman Islands financial services minister says there is a worrying trend in attitudes towards offshore financial services in Europe that would go well beyond concerns about automatic exchange of information and public access to beneficial ownership. Wayne Panton said some European politicians appear to be reverting back to arguments from the 1990’s that zero or low tax jurisdictions should be penalised and that financial centres with no direct tax could merge on new blacklists.

Following his recent trip to Brussels, where he appeared before the European Parliament’s TAXE2 Committee to answer questions about the Cayman Islands and transparency, Panton told CNS Business, “There are those who want to take us back to the 1990’s and penalize countries for their internal tax systems.”

The minister, however, said that it was that transparency that should be the key argument, not tax rates.

“This talk of tax rates is unjustified and inappropriate. It should be purely about transparency but they are trying to use the Panama Papers, in my view unfairly, to justify draconian proposals again. Although this is far from certain, the mere mention of it is a concern,” he noted.

Panton was in Brussels last week to address the committee, comprising more than 30 people, though the questioning was directed by a five-member sub-committee panel.

The minister said he spent a lot of time fielding questions about why Cayman has an indirect and not a direct tax system and explaining how it was able to supports local public finances. He also answered questions originating from misinformation, some of which, he maintained, was generated by the Tax Justice Network.

Grilled about the rational of relying on the private sector to comply with laws, retain the information and make the information exchanges, Panton said he explained the levels of compliance and transparency and how the system worked, as well as the significance of the Cayman Islands in the global economy and its value.

“The meeting gave Cayman a remarkable opportunity to define key features of our economic model for European Union lawmakers,” he said.

Despite the tough questions, Panton was confident that he was able to address everything thrown at him and that the members could not conclude that he and his staff had dodged any of the questions.

“It was a useful exercise and the first opportunity we have had to sit in front of any European Union representative body and address questions and enlighten them about our system,” the minister said. “We will welcome the opportunity to contribute in that way again. For too long we have kept our heads down and not justified our existence, but we are now unapologetic about what we do and the value we add to global economy, even in face of some who would cast allegations against all financial centres.”

Panton said the latest EU blacklist that had included the Cayman Islands was now being addressed. With the anticipated new tax deal with Spain, there would just be four countries that have yet to remove the jurisdiction from the most recent European list.

Panton was accompanied at the meeting by Department for Financial Services Policy and Legislation Director Michelle Bahadur and the Department for International Tax Cooperation Director Duncan Nicol.

The TAXE2 committee was established by the European Parliament in December 2015 for a six-month timeframe. At the European and international level, the committee focuses on harmful corporate tax regimes with the aim of fighting tax evasion and aggressive tax planning, notably by increasing transparency and cooperation between governments and between national parliaments.

British crown dependencies Jersey and Guernsey, overseas territories Bermuda and Gibraltar, as well as Andorra, Lichtenstein and Monaco, also have addressed the committee on similar subjects.

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Category: Finance, Financial Services

Comments (10)

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  1. Anonymous says:

    Can you tell the US and UK, as well as other EU members to please open up their tax hiding jurisdictions in their own mother land so that they all come to light? If you cant do that, or they wont do it, then you might was well shut up, because you have nothing to talk about.

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  2. Anonymous says:

    The EU is entitled to take that view on both moral and fiscal reasons. If the belief of the EU states is that blacklisting tax havens completely is in their interests they are perfectly entitled to take that position.

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  3. Anonymous says:

    Now, unna imagine if Makeewa was still Minister of financial services and had to debate these critical issues overseas!

    Notice we didnt have to pay Minister Panton anymore for him to speak on Cayman's behalf regarding our financial services.

    I'm sure Makeewa would have hired a string of lawyers to speaker for him and cost the govt hundreds of thousands of dollars for the speakers and another hundred thousand for the entorage that went on the trip.

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  4. Anonymous says:

    Sadly, these islands have a huge credibility issue. Part of this is simply that in the past representatives of the financial sector (and I'm thinking about one in particular) have felt it was better to slag off our critics than address their concerns and complaints. But possibly the most serious damage to the Islands' reputation has been caused by CIG's inability to manage its own finances. How can you trust a jurisdiction to manage $billions in offshore accounts when most of their own civil service can't even produce valid annual accounts?

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    • Anonymous says:

      I'm sorry, are you suggesting that countries such as the UK and US have had governments that have been able to properly manage their own finances without accumulating significant debt?! China and Japan virtually own the US as its major creditors. Exactly what parallel universe are you living in?! Have you some how imagined that all the sums of money they have managed to obtain from their citizens has been properly and meaningfully spent and not wasted in vast sums. That tax payers are just delighted with how their hard earned money has been applied and that those that pay the most, feel that they should pay more because its tax money well spent. sadly perhaps your own bias has clouded your judgement and your own credibility in this must be questioned (if you really think about it).

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  5. Dominique says:

    Thank you Minister Panton. This minister is the most qualified to be Premier of the Cayman Islands. If the PPM is a viable party for the future they will put Wayne forward to be the next Premier prior to the next election, otherwise they will lose to McKeeva's party. I think that Moses can continue to be Deputy Premier but Alden does not have the personality or the speech to discuss the matters at a conference like what Wayne just came from attending. In fact, Alden may not even get elected with "one person, one vote", but Wayne will.

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  6. Anonymous says:

    Thank you Minister Panton - refreshing that our elected official is able to intelligently discuss our financial service industry and stand up for us in Europe.

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  7. Anonymous says:

    He is right. And he was there with an agenda of barring public access to information on beneficial ownership in these parasitic havens, that is to prefer secrecy over transparency. These havens offer places for the rich to move assets and immorally avoid taxes by using trusts or defer taxation or locate IP rights there as fiction to dodge taxes by transfer pricing or allow relatives of politicians to hide their seedy and corrupt deals etc need to be blacklisted and dealing with them either made illegal or subject to massive onshore taxation.

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    • Anonymous says:

      Are you sure you're not confusing us with the U.S. and extracted some of Sanders allegations against Hillary for this little rant. But I digress. Yes I agree with you. Shall we start with the larger tax havens the U.S. or do they not count?

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