Finance industry the focus
Leader of Government Business McKeeva Bush spent much of his new government’s first month in office out of the country on negotiating trips to foreign countries, seeking to sign tax information exchange agreements.
Mr. Bush said this week that those agreements were vital to the survival of the Cayman Islands finance industry.
Cayman is one of 38 countries placed on the Organisation for Economic Co-operation and Development’s list for countries that are not entirely compliant with international reporting standards in the area of financial services.
That ‘grey listing’ means Cayman has committed to financial reporting standards, but has not substantially implemented those plans.
‘The (Organisation for Economic Co-operation and Development) has indicated that financial centres which did not have a minimum of 12 Tax Information Exchange agreements in place would not be elevated to the so-called ‘white list,” Mr. Bush told the Legislative Assembly Monday.
‘The government has received feedback from numerous representatives of the financial services industry since the country was grey-listed,’ Mr. Bush said. ‘This feedback indicated that being on the grey list, particularly when some of our competitors were not, was causing damage to the reputation of the financial services industry.’
Mr. Bush said, to date, Cayman had signed 10 tax information agreements, and planned to sign agreement number 11 with the Netherlands on 8 July.
A frequent criticism of Cayman and other offshore financial jurisdictions has been that they are lax in tax reporting requirements.
‘I see it as the new government’s job to do what is necessary to remove this jurisdiction from the grey list and to restore our good reputation,’ Mr. Bush said. ‘My job as leader of this government…is to get this country out of this mess and my government is going to achieve that.’
The new administration has made Cayman’s financial industry one of its top priorities, and Education Minister Rolston Anglin indicated Monday that the government was indeed concerned about companies moving to other jurisdictions especially in a weakened world economy.
‘Being on the grey list has caused us to lose business,’ Mr. Anglin said.
Mr. Anglin warned that in both finance and tourism, customers have many choices, and there’s no reason they have to choose Cayman.
‘We’re kidding ourselves,’ he said. ‘These last four years are proof that we have to remain competitive.’
The government has indicated it would consider changes in the country’s seven-year term limit on residency of foreign workers employed in the finance industry.
‘No one can tell me that it makes sense to have a policy that deals with domestic helpers the same way as it does financial services,’ Mr. Anglin said.