Bermuda’s representative in the US has launched a defence of the Island’s tax system.

And head of Bermuda’s Washington DC office Cheryl Packwood appealed for US legislators to treat Bermuda as an ally and economic partner — not a tax haven.

“Unlike the ‘tax havens’ that have attracted attention recently, Bermuda’s tax system pays for public services that attract and retain a highly-skilled workforce, successful companies and sophisticated tourists,” she said.

“Bermuda collects taxes equivalent to 16 percent of its Gross Domestic Product, mostly through taxes on payroll and imports. Far from evading taxes, Bermuda-based international insurance and reinsurance companies generate more than 70 percent of the Island’s total tax revenues.

“If you are locating a shell corporation to shelter profits, you are 100 times more likely to do this in the British Virgin Islands rather than Bermuda.”

Ms Packwood was writing in The Hill — an influential online magazine said to be read by the White House and US politicians more than any other site.

Ms Packwood wrote that Bermuda had been a key ally of the US in times of war and that history showed “our nations are natural friends, allies and economic partners.”

She added that America and Bermuda also shared traditions of democracy, free enterprise and the rule of law.

And she said that the Island and the US had shared a tax treaty for nearly 30 years, which binds Bermuda to sharing tax information on assets and investments held by US citizens and corporations in Bermuda.

“This information-sharing helps to identify the true ownership of businesses so that foreign governments can collect the taxes that they are due,” Ms Packwood wrote.

And she pointed out that Island-based insurers and reinsurers had paid out an estimated $35 billion in catastrophe claims to US clients over the last 12 years alone.

She told US legislators that this included $2.5 billion after the terrorist destruction of the World Trade Center in New York, $17 billion in the wake of 2005’s Hurricane Katrina, which devastated New Orleans and the Gulf Coast, $2 billion for tornado damage between 2010-12 and around $3 billion for Hurricane Sandy, which wrecked swathes of the US East Coast in 2012.

Ms Packwood added that US Attorney General — on a visit to the Island in 2010 — had “flatly denied” that Bermuda was a tax haven.

“Further promoting Bermuda’s transparency on tax matters, representatives of the governments of the US and Bermuda signed an agreement last December to uphold and enforce the provisions of the US Foreign Tax Compliance Act,” she said.

Ms Packwood also pointed out that the Island had signed 80 tax information exchange agreements internationally.

She added that more than half were bilateral and in line with Organisation for Economic Cooperation and Development (OECD) rules.

And she said that the OECD had recognised Bermuda’s clean hands approach to finance by adding the country to its “white list” of jurisdictions that are “fully co-operative on tax policies and other international tax policies.”

Ms Packwood added that the Bermuda Monetary Authority (BMA) was also internationally recognised for its work in promoting a good regulatory framework.

She wrote: “With its risk-based regulatory approach, progressively rigorous requirements are placed on insurers and reinsurers, based on the nature scale and complexity of their business.

“This approach has been endorsed by the international community, including the International Monetary Fund.”

She added the Island had lined itself up with other countries in the war against drugs and terror, with tough sanctions for financial institutions that failed to comply with Island laws and international standards.

And Ms Packwood told US lawmakers: “The next time American politicians and the news media lump Bermuda together with ‘tax havens’ remember the facts.

“Bermuda is committed to international cooperation on matters from taxation and regulation to hemispheric defence.

“An alliance forged in the flames of international conflict should not be sacrificed on the altar of political expediency.”