BASSETERRE, St. Kitts — Two major objectives that promise long-term positive effects for the Caribbean Community (CARICOM) were accomplished during its Feb. 26-27 Inter-Sessional Meeting of the Conference of Heads of Government in St. Kitts.
First, CARICOM officials agreed that the European Union’s (EU’s) approach to “tax good governance,” is an infringement on sovereignty and one that is coercive and harmful to the future of a key economic sector in CARICOM.
Second, the Heads of State unanimously approved contingent rights protocol which is a key aspect of CARICOM’s Single Market and Economy (CSME), which refers to the rights granted to a CARICOM national and his spouse and immediate dependent family.
CARICOM Chairman and Prime Minister of St. Kitts and Nevis, Dr. the Honourable Timothy Harris, said the EU’s arbitrary and shifting tax requirements have considerable reputational damage to Caribbean countries which are irreparable and have consequential implications for building Member States’ economic and climate resilience given the region’s inherent vulnerabilities.
“We do not think that it has the appeal of a democratic process or a consensual process and we take exception to that matter,” explained Dr. Harris. “Each time there is one problem [and] that problem is addressed, by the next time the EU comes around there is a second and third problem. So the goal post keeps shifting in a way that makes management of the industry difficult and creates uncertainty.”
In this regard, CARICOM Secretary-General, Ambassador Irwin LaRocque said the regional body must continue to use a united voice in reaching out to the European Union (EU), allied countries and countries outside the EU bloc to build their case against this matter.
“There comes a point when you have to say to them, ‘if you’re not going to have some meaningful dialogue, if you are not going to have some understanding on the circumstances in which we are, then we’ll have to have recourse to other things,” said Ambassador LaRocque. “We have 14 Member States that collectively when we act together, which is not infrequent, can have a voice internationally. We’ve done it before and we are seeking to see how we can do this again.”
LaRocque stated that the EU has taken it upon themselves to “set certain criteria which go above and beyond criteria set by the Organisation for Economic Co-operation and Development (OECD), which is the recognized international body that looks at matters of tax and good governance.
“In particular, we are extremely concerned that opportunity for dialogue with Member States who are so blacklisted or greylisted is almost non-existent,” said LaRocque. “We feel that it is a significant overreach into the sovereignty of Member States and we go so far as to consider it, especially for those Member States whose economies rely heavily on the international business sector, an assault on the economic economies of these countries.”
The official communiqué issued at the end of the 30th Inter-Sessional says CARICOM Heads have proposed that the EU should adopt a more collaborative approach which would allow Member States to conduct the required impact and sensitivity analyses to determine how to further align their tax regimes with global standards for tax transparency and governance.
Protocol of Contingent Rights
Dr. Harris highlighted gains made towards the regional integration movement, particularly through the signing of the Protocol of Contingent Rights by all CARICOM Member States, as one of the success stories coming out of the meeting.
The official communiqué issued at the conclusion of this week’s Inter-Sessional Meeting stated that, “Eight countries have decided to apply measures that would allow their nationals to benefit in those countries from the provisions of that agreement on contingent rights which allow for spouses and dependents of skilled workers who move to another country to access services such as education and health on the same basis as nationals.
The countries involved are Antigua and Barbuda, Barbados, Dominica, Grenada, Guyana, St Kitts and Nevis, Saint Lucia, St Vincent and the Grenadines and Trinidad and Tobago.”
The CARICOM Heads reached an agreement on a protocol to deal with public procurement that would open the regional market for goods and services procured by public entities.
“All in all, we had a very successful two days which would redound to the benefit of the citizens and to our international image,” Prime Minister Harris stated.