May 4 -10, 2013
NEWS
TURKS AND CAICOS WEEKLY NEWS
7
Premier supports automatic info exchange
BY VANESSA NARINE
PREMIER, Dr. Rufus Ewing, on Tuesday in a letter to David Cameron, congratulated the United Kingdom government on its newly acquired presidency of the G8. He also underscored the Turks and Caicos Islands’ support of the establishment of a multilateral automatic information exchange. He said: “We subscribe to the notion that the fight against tax evasion and fraud is rightly a global priority, necessary to protect the integrity of public revenues, the confidence of taxpayers in the fairness and effectiveness of their tax systems and ultimately public confidence in open global capital markets.” The Premier pointed out that the TCI supports the efforts of the G8 and open governments everywhere in the battle against tax evasion and fraud. It has consistently worked with international partners to meet international standards and in particular, the peer review process by the Global Forum on Transparency in the exchange of tax information. Ewing expressed support for Cameron’s stated priorities of trade, tax compliance and transparency of the UK’s G8 Presidency. He said: “In particular we welcome the prominence of the issue of tax evasion and avoidance on the G8 agenda at its meeting to be held in Lough Erne, Northern Ireland in June 2013. “We also support the United Kingdom Prime Minister’s call to action in his letter addressed to the President of the European Council on April 26 2013, in the following four key areas: a new global standard for multilateral information exchange; action plan to increase transparency in beneficial ownership; reform of global tax rules; and improving the ability of developing countries to collect tax. He added: “We welcome the work of the Organisation for Economic Co-operation and Development (OECD) to develop a common model for automatic exchange of bank information. The United States Foreign Account Tax Compliance Act (FATCA) has become a catalyst for the global standard that the Prime Minister envisions. In the view of the SecretaryGeneral of the OECD: “The political support for automatic exchange of information on investment income has never been greater.” OPEN ECONOMY The Premier noted that the TCI operates within the framework of an open economy, thriving in open, transparent and competitive markets. He said: “We are also committed to developing our financial service industry as a dynamic, successful and well regulated sector which meets globally recognised standards of transparency and compliance and we stand ready to respond to change. “The Turks and Caicos Islands
will embrace this next step and commits to entering into automatic exchange of information agreements with the UK to the same timetable as the agreements which we are currently finalising with the US.” Ewing pointed out that, as history will reveal, the TCI acceded to the OECD process in 2002 and has moved gradually to enacting appropriate legislation to give effect to the sixteen Tax Information Exchange Agreements (TIEAs) entered into to date, mainly with OECD countries. He said: “To this end the Turks and Caicos Islands has established an Exchange of Information Unit within the Ministry of Finance with dedicated staff working hard to ensure that the Turks and Caicos Islands meets all of its tax treaty obligations. “The Turks and Caicos Islands successfully underwent the Phase One Peer Review process and are among the first set of jurisdictions currently within the Phase Two process. “The Turks and Caicos Islands continues to work with our partners as we reform and strengthen our laws and administrative systems to ensure their effective implementation and values the recommendations that emanate from the reviews and assessments of our global partners and endeavour to give effect to them. “Since accepting the European Union Directive on the Taxation of Savings Income and enacting legislation in 2005, the Turks and Caicos Islands formally transitioned from the withholding tax arrangement under the directive to the automatic exchange of information arrangement in July 2012. “With the advent of the FATCA, the Turks and Caicos Islands undertook the necessary consultations with all stakeholders in the jurisdiction with a view to
Premier, Dr. Rufus Ewing
bringing about cooperation on the subject with the US government, and has decided to enter into a FATCA arrangement with the US as part of its negotiations to conclude a TIEA.” According to him, in that vein, the TCI has taken the decision recently to engage the UK in negotiating and concluding an Inter-Governmental Agreement that emulates the UStype FATCA. The Premier said: “The Turks and Caicos Islands continues to negotiate TIEAs with jurisdictions that are inclined to concluding such arrangements and have a further 11 TIEAs in various stages of negotiations and has decided to explore a multilateral approach. “Furthermore, building on our actions as regards the EU Savings Directive, we also commit to joining in due course the pilot multilateral automatic exchange of tax information announced recently by the United Kingdom, France, Germany, Italy, and Spain. “The Turks and Caicos Islands also calls on other jurisdictions to commit to this initiative, and remove the opportunity for arbitrage between jurisdictions.”
LIMITED RESOURCES Ewing highlighted the fact that the TCI is a small jurisdiction with limited resources. He called for the United States of America and the European Union (EU) to align their tax information requirements to avoid duplication of the burden placed on small states like the TCI. He said: “We further call on the United Kingdom to deliver on its promise to assist the Turks and Caicos Islands in the development and expansion of its financial services industry. “The Turks and Caicos Islands recognises the need to work on going further to improve the robustness and availability of information on beneficial ownership. “The work of the Global Forum and the Financial Action Task Force (through the regional oversight provided by the Caribbean Financial Action Task Force) has led to significant improvements, which the Turks and Caicos Islands has supported. “We recognise that the global standards continue to develop and we commit to internal assessment to ensure continued compliance with internationally established standards. “We are determined to work with our partners to take forward this agenda and hereby commit to review the effectiveness of our legal and enforcement framework and to produce an action plan aimed at ensuring that we are in the forefront of jurisdictions in respect of information and enforcement of rules on beneficial ownership as well as the other required standards reflected in the 2012 revised FATF Recommendations and the methodology adopted in February 2013.” Ewing made it clear that, although small, the local financial services sector reflects high standards, which are in sync with the required global standards.
He said: “We are not a tax haven. High standards do not frighten us and we recognise that they are good for business. “But we are determined to work for the fair application of those standards to all financial services sectors everywhere, whether off shore or on shore. “We look forward to working in close cooperation with the United Kingdom, the other Overseas Territories and international partners on these commitments and would urge rapid development of new global standards in these areas applied fairly to all, regardless to size and economy.” The Premier’s letter to Cameron followed Governor Ric Todd’s briefing to Cabinet, last Wednesday (April 24), on the fast moving developments and preparations by the G8 on the issue of tax transparency and mutual sharing of information ahead of their next meeting of heads of government. Cabinet noted that it is inevitable that further global measures will be adopted on automatic exchange of information on tax and tax transparency and that momentum on the issue is rapidly gaining across the world with particular focus on information about the beneficial ownership of companies for regulatory and tax exchange purposes. The TCI already does this for trusts and banking sectors, however, Cabinet agreed that it was in the interests of TCI to take a proactive role in global discussion on tax transparency matters and that further consideration would be given to a political commitment in the near future for TCI to engage in shaping the reform. Cabinet also underlined that there must be a level playing field for all jurisdictions and that TCI is not disadvantaged compared to competitors.
Ewing outlines vision for tourism BY VANESSA NARINE
AS THE new Tourism Minister, Premier, Dr. Rufus Ewing, took his vision for a revamped tourism industry to the House of Assembly last Friday (April 26). In his ministerial statement to the House, Ewing noted that he has taken over the ministry with enthusiasm and a vision for transformation and sustainability. He stressed the fact that given the industry’s fragility and the fact that it contributes 40 per cent to the nation’s Gross Domestic Product (GDP), sustainability has to be a key platform. On that note he reported that work has already begun on a strategy for the sector, which will address marketing and promotion of the Turks and Caicos Islands as a tourist destination. Ewing noted that the strategy looks at expanding the Islands’ niche products and decentralising the tourism sector which is key for the sustainability of the industry. The Premier said: “We have to look at
attracting and developing tourism on other islands.” According to him the focus can be culture based tourism on all islands, agro-tourism in North Caicos, eco-tourism in Middle Caicos, which is famous for its caves, and hotel development in Grand Turk, among others. Ewing underlined the fact that the strategy puts an emphasis on safety, security and services, “the three Ss,” as he dubbed it. He explained that as it relates to safety, regulations are being looked at to ensure visitors can be safe when accessing TCI’s tourism products. When it comes to crime, the Premier maintained that his Government stands by its zero tolerance policy and is working together with the community, as well as other agencies, to provide tools and support police work. Provision of jobs for youths is also a major focus, to allow them to have the opportunity to earn a living, and the facilitation of youth programmes to keep them gainfully engaged. Ewing made it clear that crime threats can
seriously damage the TCI’s tourism product. Focus on the last S, service, according to him will see the level of services enhanced to ensure that customer satisfaction is high. The Premier pointed out that March has been best month for tourism for the Islands, with over 90 per cent of hotels reporting 100 per cent occupancy – stellar performance that he credited to the investments made by the former administration in promoting and marketing the TCI and partnership with the industry’s stakeholders, as well as bringing investors and developments to the Islands. He said: “We were successful is creating a brand, but have to focus on diversifying and ensure full development of niche products, for which we are known and can be number one.” According to him, the level of interest is encouraging. Ewing maintained that the tourism strategy is a comprehensive plan to advance the sustainability and, by extension, the success of the industry.