New Caribbean Calypso Discovered – but will the Tories like it?

The Caribbean has long been famous for its whimsical and sometimes satirical popular songs called calypsos. A bit like the blues with added sunshine, they often make wry comments on the contradictions and absurdities of life.

A new one has recently been discovered in the Cayman Isles.

It goes like this,
“Oh, the Cayman Islands are very pretty,
The tax you pay is just itty-bitty;
Tell the Tax Man you’ve set up shop
Where his tax demands will have to stop!

Oh, the Cayman Islands are the new location
Where there’s no tax calculation.
In our new-found domicile,
Our businesses can make a pile!

Oh, the little people can buy our stuff,
Pay for our services more than enough,
And while our profits max and max,
The little people can pay the tax!”

The Cayman Islands are not just a holiday destination, but also the fifth largest banking sector in the world, with a number of major banks, leading global financial institutions, accountancy practices and offshore law firms having active presences there.

And there are a huge numbers of registered companies in this UK Crown Dependency. According to the Cayman Islands authorities, in are more than 100,000 registered companies in the Cayman Islands. Most of them (84%) are Exempted Companies with Limited Liability and in a large proportion of cases the owners are living overseas and doing business outside of the Cayman Islands.

From time to time large and significant corporate restructurings involving the Cayman Islands take place, possibly without UK Government knowledge and approval. This raises the question as to what the Tories in general – and the various ministers responsible for getting taxes in, in particular – have been doing to gain oversight and protect the UK from expensive tax avoidance?

HSBC reportedly expected “that the agreements made under Automatic Exchange of Information (AEOI) by the UK, the Crown Dependencies and the Overseas Territories will be replaced by the OECD’S Common Reporting Standard (CRS) Agreements from 1 January 2016”.

But this does nothing about getting rid of the ridiculous situation where UK Government tolerates zero or near-zero tax regimes in territories than are not independent. They wouldn’t tolerate such situations in Scotland or Wales – though who on earth knows what goes on in the Channel Isles or the Isle of Man!

Of course the Labour Government didn’t do anything about this either.

However the UK has a social infrastructure that is expensive to maintain – banking and finance in these mysterious and secretive Crown Dependencies should be subject to the same laws regulation and transparency requirements as in the UK!

Cui bono?

And apologies to Harry Belafonte…..