Barbados Attorney Recommends CARICOM Nations Develop Own Tax Policy Amid OECD Global Minimum Tax Discussions

Barbados and other CARICOM member states should establish their own tax policy to be used when doing business with the rest of the world.

That is the recommendation of Barbadian attorney and tax expert Lynette Eastmond, who said the Organisation for Economic Cooperation and Development (OECD) was “carving a tax policy that suits them”.

Eastmond, who served as Minister of Commerce, Consumer Affairs and Business Development during the Owen Arthur administration, and was also previously Government’s Director of International Business, made the suggestion on Wednesday during a SRC Lunch Time Chat webinar cohosted by the Shridath Ramphal Centre (SRC) of The University of the West Indies, Cave Hill and the Caribbean Policy Consortium.

The discussion focused on Base Erosion Profit Shifting 2 (Pillar 2), which is the global minimum tax component of the OECD-led effort to reform international corporate tax rules.

“I think it is important for CARICOM to develop its own international tax policy outside of organizations like the OECD because our international tax policy must suit us. The OECD is carving a tax policy that suits them,” advised Eastmond, who is lead counsel of Eastmond & Company.

“We have to determine how important these tax developments are to CARICOM economies and I think we need to prioritise initiatives that are important to us.”

Tax reform

Barbados’ most recent corporate tax reform took effect in January last year as the island conformed with the OECD global minimum tax requirements.

Eastmond noted that CARICOM “has been discussing these issues . . . and CARICOM has also had interaction with the OECD”.

“Particularly coming out of the discussions with the OECD, CARICOM made a commitment to do a study on the impact of Pillar 2 on CARICOM countries,” she said.

“So Bahamas and Barbados have definitely implemented the aspects of Pillar 2 which they believe to be beneficial to them and I understand that Jamaica is about to implement that very soon.”

Eastmond said CARICOM’s establishment of a unified position on tax did not necessarily means member states had to have the same tax rates.

“In my time, I know that CARICOM tax administrators have met to discuss one tax rate, or a fixed set of incentives for all jurisdictions. I haven’t been involved in it recently, but there was never any consensus, really, and the question would be, is it necessary for each country to have exactly the same tax rate?