The European Union has blacklisted several Pacific nations that “encourage abusive tax practices”.
Its recent council report has pointed out non-EU countries that it has alleged encourage abusive tax practices, which “erode member states’ corporate tax revenues”.
American Samoa, Fiji, Guam, Palau, Samoa and Vanuatu were six of only nine nations in the world that the EU consider “non-cooperative jurisdictions for tax purposes”.
The others that were named and shamed were Panama, Trinidad and Tobago and US Virgin islands.
The EU says the list was to address external tax bases and to improve international tax governance, “given the global nature of unfair tax competition”.
The named Pacific nations are accused of being a haven for tax fraud and/or evasion over illegal non-payment or under payment of tax; tax avoidance by the use of legal means to minimise tax liability, and money laundering on the concealment of the origins of illegally obtained money.
“By identifying these countries at EU level, member states can act together to put pressure for reform,” the report says.
The list came out soon after the release of the Pandora Papers, an investigative journalism report of millions of worldwide leaked documents of supposed dubious tax havens.
Samoa had been one Pacific nation targeted in the documents, but since its release on October 3 the Samoa International Financial Authority has remained steadfast it is complying with all international tax requirements.
Asian financial centres Hong Kong and Singapore that were both named in the Pandora Papers were however spared by the EU among other jurisdictions that top the Tax Justice Network’s Financial Secrecy Index.