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Not going to London would have been a missed opportunity

The dreaded i-word was bound to come up, I suppose Mr Acting Editor. It was too good an opportunity for some to pass up on the opportunity to revive the issue of independence for Bermuda. I suppose too, that like clocks that have stopped ticking, it will eventually turn out to be right one of these times. But not this time, I don’t think; at least not yet.

So the UK PM wants to meet with all the Overseas Territories, including Bermuda, ahead of his G8 summit. We shouldn’t be too surprised. On the contrary, those who have been following the plot are well aware of the forces that are at play here. It isn’t just Britain looking to crack down on so-called tax havens. You need more than two hands to keep track of the numbers of countries (G8, G-20) and the alphabet organisations that are leading the charge. The offshore storm clouds have been gathering for some time now. They were the subject of this column a few weeks back even. But I claim no special credit: even Stevie Wonder could see what was coming.

Austerity is not proving that popular on the home front. Neither does it seem to be working that well. Most of these countries, if not all, are desperate for more revenue, and money, and more money, friends, makes the world go around, the world go around. But life is no cabaret. Very few seem to be interested in making any distinction between a tax haven or low tax jurisdiction in the offshore world. On home soil it’s a different story of course: this week’s most recent example is that of Texas campaigning for new business in New York State on the basis that Texas offers low corporate taxes and no personal income tax.

This sort of competition between jurisdictions for business has been going on for centuries. You might think it worth encouraging, depending I suppose on which side on the fence you are on.

So we try to make the case between tax evasion and tax avoidance, which is when people and companies organise their affairs to legitimately minimise their tax burden. But what’s really got the big G-guys bugged is what they now term “aggressive” and/or “immoral” tax avoidance, particularly by corporate giants who have found ways and means to organise their businesses, legally, to minimise their tax exposure by the millions. The point has already been made here: there is work for them to do in their own backyards.

But back to this mini-summit before the summit. We need to be there and we need to make the case for just what it is we do and don’t do here in Bermuda. It is crucial too, that we speak with one voice that is clear and consistent.

For some time now, and I don’t just mean in recent years, Bermuda has attempted to tick all the boxes to show that we are not in the business of tax evasion and money laundering. In fact, we might be able to demonstrate that we are doing a better job than those who are looking to crack down on us. By being in the mix, we should also get a better sense of what further moves are needed to keep us competitive and on the right side of the curve.

Not showing up would have meant a lost opportunity. Our petulance might have been mistaken for belligerence or worse still that we had something to hide. It will also be good to know where we stand and who stands with us, and on what.

It used to be that Bermuda was able to fly under the radar as we developed as an offshore financial centre, but not anymore. We are going to have to find new ways to navigate our way around new challenges and a rush to independence should not be a first option. There are a lot of frying pans out there, aside from Britain, as well as plenty of fire and crossfire to watch out for.

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Published June 14, 2013 at 9:00 am (Updated June 14, 2013 at 12:01 am)

Not going to London would have been a missed opportunity

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