(CARICOM Secretariat, Turkeyen, Greater Georgetown, Guyana) A two-day seminar aimed at reviewing how the ten-year old Intra-CARICOM Double Taxation Agreement (ICDTA) was functioning got underway Monday morning at the Grand Coastal Inn in Guyana.
Dr. Maurice Odle, Economic Adviser to the Secretary-General of CARICOM welcomed the Heads of Tax Administrations and other representatives to the seminar and urged that the interactive and issues-oriented sessions be used to review the Agreement to ensure that it was working as intended and was benefitting all signatory Member States.
Positioning the seminar within the context of the global downturn, Dr. Odle said that from all accounts, the efforts by Member States to address the challenges created by the crisis had led to a drain on fiscal revenues “in a situation where fiscal space was extremely limited”.
“I am sure that as tax administrators, you have been called upon to maintain and even increase tax revenues in a situation where almost all aspects of economic activity have been on the decline. In such circumstances, it is important that we seek to ensure that instruments which impact on tax revenues are functioning as intended, hence one of the main objectives for the convening of this seminar,” he said.
The ICDTA is a unique multilateral instrument for the avoidance of double taxation, prevention of fiscal evasion with respect to taxes on income, profits, gains and capital gains, and encouragement of regional trade and investment.
The Agreement, Dr. Odle explained, had a clear development orientation and therefore stood in stark contrast to other similar instruments which focused primarily on the exchange of tax information to assist in the avoidance of double taxation and the prevention of fiscal evasion.
He told the participants that the CARICOM Secretariat had received feedback that the ICDTA was one of the most widely applied regional instruments. However, there had been several abuses of the Agreement and some Member States had been disadvantaged as a consequence.
The seminar, he added, was an opportunity for the designated Competent Authorities and/or the Heads of Tax Administrations and other officials to review the administration and application of the Agreement and to address issues resulting from this process.
Among the issues the seminar will address are those related to differences in interpretation of provisions of the Agreement, as well as the modalities for the activation of a clause on the Exchange of Information.
Participants will also review a draft of the Technical Explanations which would underpin the interpretation of the provisions of the Treaty. The Technical Explanations are expected to set out the rationale for prevailing principles and policy objectives of the Agreement.
Key elements for the administration of the ICDTA will also be discussed, including instruments to support the administration of the Agreement, and the role and functions of Designated Competent Authorities.
Recommendations from the seminar will be placed before the Council for Finance and Planning (COFAP) when it meets early next year.
