(CNS): Financial Services Minister André Ebanks sat down face to face with members of the European Parliament last week to address the allegations that Cayman is a secretive tax haven. Answering questions from the EU Parliament’s Subcommittee on Tax Matters (FISC) in an exchange of views session, Ebanks explained how this jurisdiction works and the commitment it has made to ensure that everyone pays tax where it is due and that Cayman does not provide a haven for criminality or tax dodging.
Ebanks was invited to speak with the committee to provide a better understanding of the Cayman Islands’ partnership with jurisdictions to prevent and detect international tax crimes, in accordance with OECD standards. In his opening comments, Ebanks pointed out that the Cayman Islands’ system of indirect taxation was the result of the country’s unique circumstances and “not contrived with global tax competition in mind”.
He explained that historically, taxes have always been consumption-based in Cayman, levied from duty on imports and fees for services, creating an environment where it is impossible to avoid paying taxes. He explained in detail Cayman’s role in the international financial system and the model that it has adopted over the years, providing a specific type of service that can best be described as an investment hub and not a tax haven.
“Like EU Member States and other countries around the world, the Cayman Islands endeavours to offer the best possible opportunities for our people to thrive and grow. Similarly, we are concerned about global issues, including climate change and economic stability,” he told the committee before answering their questions. “We also recognise that every government must collect sufficient tax revenues to deliver public services, such as healthcare, financial assistance, infrastructure and education.
“The Cayman Islands’ firm position is that, as a global partner in fighting financial crime, we share tax information with relevant law and tax officials. This helps to ensure that taxes are paid where profits are made; and that governments are able to fund the projects and programmes that support their respective citizens,” he added.
To address misunderstandings or information gaps that some MEPs might have, Ebanks shared details of the Cayman Islands’ progress in improving its regulatory regime since the 1960s. He answered all their questions in a direct and forthright way, including why Cayman’s tax system is not harmful to other jurisdictions that levy a direct tax.
FISC was established by the EU Parliament to assist in the fight against tax fraud, tax evasion and tax avoidance, as well as for tax transparency purposes. While they did not necessarily appear convinced by everything Ebanks said, they all welcomed the fact that he had attended as the committee and made an effort to explain.
FISC Chair Paul Tang pointed out that ministers in similar positions to his in other jurisdictions, even in Europe, were often ‘very busy’ when the committee called on them. Although Ebanks is the first financial services minister to meet with this committee, in 2017 Premier Wayne Panton, the Cayman Islands financial services minister at the time, addressed TAXE2, the committee that predated FISC.
After the exchange, Ebanks invited Tang and the other members to visit the Cayman Islands and learn more about the country’s role in facilitating tax-neutral investments. “We have done much to establish ourselves as a global partner,” Ebanks said. “But, to dispel the legacy misperceptions, we must be willing to engage in respectful, open and frank discussions.”
See more information on the Department for International Tax Cooperation website.
See Ebanks appearing before the committee on the EU streaming service here:
