Vexed Bermoothes

Clamping down on offshores is the new cool.  Even Gordon Brown is getting excited about it.

But in that excitement, there’s a worrying blurring amongst the leaders regarding “tax avoidance” and “banking secrecy”.   They are turning their scramble for tax dollars into a moral crusade.

The Guardian breaks this down nicely:

It is true that excessive taxation harms business. It is also right that governments should be allowed to attract companies by offering competitive tax rates. But there is a difference between creating a tax regime that is good for open commerce and setting one up to be deliberately opaque. Regimes that do the latter should be ostracised by international treaty.

[Instead of tax haven] a better expression is “secrecy jurisdictions”, where, along with the profits of legal activity, the spoils of fraud, terrorism, drug trafficking and plunder by despotic regimes are hidden. That is the company that global businesses keep when they operate offshore.

And this is the message that Bermuda should be pounding upon, day in and day out.  We are not a banking secrecy jurisdiction.  Ok, sure we are unabashedly tax competitive. But we have clean hands.

But at the same time, we must adhere to the highest standards of good governance and transparency both internally and externally.

This is not going to be an easy balance for Bermuda to strike but it can be done.  It means dropping the barriers that have existed between the business community and the PLP so that we can build out more substance to the whole Gold Standard™ claim.