Commentary: Caribbean Taxation – Cayman and St.Lucia

CAYMAN ISLANDS – One of the biggest open secrets in the Caribbean is the use of companies in tax havens, like the Cayman Islands, to hold property, often homes, business and land in the country of residence of those same corporate beneficial owners.

Other tax havens are also used by prominent persons, even political leaders without investigation or imposition of taxes. One use, apart from secrecy of financial transactions, is the transfer of property ownership, free of declaration or transfer tax. Other persons, not prominent, rich or political, buying a house in Jamaica from the National Housing Trust or elsewhere have to pay tax, not the elites.

Land Holding Companies Law

The biggest contradiction and hypocrisy is that the Cayman Islands has a land holding companies law to prevent this activity whereas many of the tens of thousands of their companies, carry on this activity in many Caribbean countries like Jamaica.

This will not affect teachers, nurses or police or others on a fixed salary. It is a quiet perk for the rich, a private wealth club that 99% of citizens, are not members and generally do not belong, unless it is the equality of the ballot box.

It is also helpful to have bank accounts to evade taxes, an activity which is money laundering, usually associated with drug dealing. This type of money laundering takes place every day in Jamaica and the Cayman Islands without a single prosecution. The Cayman premier is too busy with photo ops to crack down on this activity, forget the leader of Jamaica. Understandable, given that the rookie Cayman premier just announced a sovereign fund with no mention of the gigantic pension and elephantine health care deficits in the room.

The silly man on a silly horse.

There are many prominent Caribbean companies that use tax havens to limit taxes while their workers have to pay the full amount. Persons using their products or services should demand that they are tax haven free, just like the common environmental protection promotions of today, which was once not the case.

Tax Administration Jamaica

In Jamaica, neither the head of Tax Administration Jamaica, Ainsley Powell, also the Guru of No Tax Haven Compliance, or Selvin Hay, head of the Financial Investigations Division, have a determined policy, program or record of prosecution of tax evaders through tax haven connections. It must be a policy decision. Perhaps the Chief Technical Director of the FID, Dennis Chung, can assist on the lack of performance for prosecution of tax evasion money laundering.

It would be no greater display of independence from undue influence.

Equally culpable would be the lack of interest shown in tax haven company ownership of Jamaican property by the Commissioner of Lands, Cheriese Walcott or the National Land Agency.

A useful example and contrast would be Norway, where every single tax return of every person is available to the public. A deep contrast to the Cayman Islands which restricts access to company ownership. This would not apply to a request from the government of Jamaica, that could lead to a massive windfall needed for the Melissa disaster.

No point holding breath as we await Caribbean government officers and leadership to fulfil their duties, fully.

The disappointed Diaspora should demand compliance of one rule for all.

As the good book provides:

Tell the godly that all will be well for them.

They will enjoy the rich reward they have earned.

But the wicked are doomed.

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