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MONROVIA, Liberia – By being blacklisted by the European Union (EU), for failing to cooperate in tax matters, Liberia risks sanctions from the EU and individual member states, as well as a dent in the country’s international reputation, multiple sources have told Punch FM/TV’s online service.
Liberia is on EU’s recently published blacklist of international tax havens, particularly being among the top 30 non-cooperative jurisdictions consisting of countries or territories that feature on at least 10 member states’ blacklists.
Tax havens allow big companies and wealthy individuals to avoid paying their fair share of tax – Punch FM/TV’s online service understands that this hurts people in countries where the taxes should have been paid – often hitting vulnerable people the hardest.
Governments that let this happen, through devious tax rates, dodgy schemes and opaque processes, are complicit in a system that makes the rich richer and keeps millions in poverty, according to the UK-based charity Oxfam International
Meanwhile, Oxfam is calling on the EU to ensure that effective sanctions are applied to harmful tax havens, to make more transparent how the EU reviews countries’ commitments and to make sure that sufficient pressure is put on grey listed countries to implement reforms.
Punch FM/TV’s online service has reliably gathered that countries on the blacklist could be subjected to a range of sanctions by EU members. These could include, among others, being deprived of development aid and being subjected to stricter reporting requirements for multinationals with activities in listed jurisdictions.
EU Economic Affairs Commissioner Pierre Moscovici told a news conference Wednesday that the publication of the blacklist was a “decisive step” that would “push non-cooperative non-EU jurisdictions to be more cooperative and adopt international standards.”
Countries on the full list are: Andorra, Liechtenstein, Guernsey, Monaco, Mauritius,
Liberia, Seychelles, Brunei, Hong Kong, Maldives, and Cook Islands.
Others are: Nauru, Niue, Marshall Islands, Vanuatu, Anguilla, Antigua and Barbuda, Bahamas, Barbados, Belize, Bermuda, British Virgin Islands, and Cayman Islands.
The rest are: Grenada, Montserrat, Panama, St Vincent and the Grenadines, St Kitts and Nevis, Turks and Caicos, US Virgin Islands.
Although critics say the publication of the list risks being seen as an attempt to distract from the EU’s need to tackle its own issues with tax avoidance, Moscovici maintains that “Corporate taxation in the EU needs radical reform,” insisting that “Member States need to pull together and everyone must pay their fair share.”
Last year, the EU released for the first time a blacklist of tax havens operating outside the EU, as they considered sanctions for those listed. It also created a ‘grey list’ of countries that qualified as tax havens and had promised reforms. After repeated calls for more transparency in the blacklisting process, the EU started commitments reforms, but as at the time of this report, no sign of any commitment of the Government of Liberia to place the country on the ‘grey list’.
Countries on the ‘grey list’ are supposed to be closely monitored by the EU, and pressured to implement the reforms they have committed to, or risk being blacklisted.
