CaribWorldNews, NEW YORK, NY, Weds. May 6, 2009: The Cayman Islands Financial Services Association has slammed back at the Barack Obama administration, over claims that subsidiaries of U.S. corporations operating in Cayman are engaging in tax fraud.
On Tuesday, Anthony Travers, chairman of the association, released an open letter to the U.s. President, insisting that it is erroneous to claim that because companies are registered in the tax haven islands to do business, that they are committing a crime.
`Nothing could be further from the truth,` said Travers, while insisting his group is completely in favor of `effective prevention of tax fraud and evasion and maximum transparency between tax jurisdictions, including the Cayman Islands.`
`The Cayman Islands has a low tax rate, just as do Ireland and other jurisdictions,` added the association head. `That is not a bad thing; it certainly is not the basis upon which to suggest illegality in the form of tax evasion.`
Travers said he is hopeful the White House `will provide us the opportunity to provide you and your administration a fuller description of the efforts the Cayman financial industry has taken to promote transparency and accountability.`
And henoted that once that is done, he is confident `that this will enable you to share our conclusion that U.S. citizens do not use the Cayman Islands to evade tax.`
Cayman-based corporate subsidiaries operate legally and transparently and are aware of no information to the contrary, added Travers. `Tax deferral arises, as you know, from current provisions of U.S. tax law that were designed to provide a competitive advantage to American companies in global trade. But this is not fraud, evasion or artificial avoidance. Historically, deferral has been used by some U.S. companies to boost the capital they have available for reinvestment, expansion and job creation. We fully recognize that the issue of tax deferral is a matter for the U.S. Government to determine, and we state no view on that subject.`
Travers` response comes on the heels of Monday’s comments by Obama on the Islands. In remarks, the President cited a Cayman Islands building where more than 18,000 US companies are housed. `Either this is the biggest building in the world or it is the biggest tax scam in the world. I think the American people know which it is,` he said.