Curtis Dickinson, Bermuda Treasury Secretary, responded to the announcement of a global minimum corporate tax rate agreed by G7 leaders, highlighting the importance of cross-border trade to the Bermudian economy.
An agreement was reached last week that supported the creation of a minimum global corporate tax rate of at least 15%, an agreement that could form the basis for a global deal.
Dickinson said, “Bermuda has always supported quality businesses while maintaining a financially responsible policy through a balanced long-term growth agenda.
“Given the importance of cross-border trade to the Bermudian economy, Bermudian authorities have always been committed to upholding international standards for financial regulation, transparency and international cooperation.”
He expressed that the Bermuda government has been subjected to independent international scrutiny by various global standardization bodies, which confirms this position.
“We have been actively involved in international regulatory and tax discussions and have continued to liaise with our key trading partners, including the UK, US and EU, on financial and other relevant matters,” he noted.
“We are fully involved in the current multilateral work of the OECD Inclusive Framework Committee on Base Erosion and Profit Shifting (BEPS) to address international concerns about profit squeezing and profit shifting.”
He expressed his support to the G7 finance ministers and the overall objectives outlined in the comprehensive document.
“We commend efforts to effectively combat climate change, fight financial crime, create more financial stability and help vulnerable economies.
Dickinson also stressed that, in view of the tax proposals put forward, it is vital that any agreed framework to introduce a global minimum tax must respect a country’s right to sovereignty over its tax system, adding that any outcome that this Rightly influenced, outside of the originally agreed goals of the OECD-BEPS initiative.
He concluded by stating that Bermuda’s consumption-based tax system has been in place for nearly two centuries and is a system geared towards efficiency in a very small and undisclosed economy.
His existing system gives a ratio of total government revenue to GDP averaging around 16%, which he considers appropriate for an economy like Bermuda.
“As these matters proceed, the conclusions reached must take into account the principles of fairness and the right to sovereignty in this important area. The considerable work that countries like Bermuda have done to be effective partners in promoting and implementing robust standards for strong and robust regulation, transparency and international cooperation should also be properly recognized. “