Bahamas: High-Level Consultations On Tax And Competition Issues In The Global Financial Market

Prior to the meeting, a joint release from the sponsors indicated that the objective will be to consider "early confidence building measures and to develop a shared perspective on the way forward in efforts to end harmful tax practices". The 2-day forum is intended also to examine measures to improve the offshore jurisdictions' administrative and regulatory capabilities and, where necessary, to provide assistance in restructuring of their economies. Don McKinnon, Secretary-General of The Commonwealth Secretariat, has said that this joint effort should aim also to arrive at mutually acceptable definitions of terms such as "harmful tax competition".

The meeting opened yesterday with Barbados' Prime Minister and Finance Minister, the Rt. Hon. Owen Arthur, in the chair, and with Dame Veronica Sutherland, Commonwealth Deputy Secretary-General, and Seiichi Kondo, Deputy Secretary-General OECD as co chairpersons.

At the opening session Mr. Kondo pointed out that the OECD and Commonwealth Secretariat, "as two important global groupings of nations around the world, both have an important responsibility in the promotion and maintenance of multilateral dialogue and cooperation". He envisaged the primary task over the following days as being to ensure fair competition between different national tax regimes in a globalised economy - i.e. competition that promotes diversity and innovation in tax systems, while at the same time leaving countries free to decide both on their rates of tax and their tax structures. The Deputy Secretary General also pointed out that the sponsors are looking for a genuinely inclusive dialogue, in which all jurisdictions, irrespective of their legal status or of their membership of different organisations, enjoy equal participation.

While supporting the principles of globalisation, forum participants are being encouraged to also address the dark side of globalisation (e.g. unevenly shared benefits) in order to maintain broad political support for open markets and for the benefits that these can bring in terms of greater freedom and choice for citizens and enterprises worldwide.

It was pointed out that OECD and Commonwealth countries share basic principles relating to transparency, non-discrimination and effective exchange of information, and also mutually agree that they must be applied evenly. Financial service sectors must be able to compete fairly and openly on a level playing field worldwide.

In his opening remarks, Prime Minister Arthur emphasised that free-market principles encourage competition. "The most competitive product will attract the largest market share". He also pointed out that "..those who gain market share call it exploiting the competitive advantage; those who lose market share call it harmful."