The British Virgin Islands (BVI) has been monitoring the Organisation for Economic Co-operation and Development’s (OECD) initiative on ‘Tax Challenges Arising from Digitalisation’ and noted with interest the 5th June, 2021 communique of G7 Finance Ministers and Central Bank Governors Communiqué committing to a global minimum tax of at least 15 percent.
Speaking on behalf of the Government of the Virgin Islands in reacting to the communique, Premier and Minister of Finance, Honourable Andrew A. Fahie said, “As a small economy, I fully appreciate that Governments must focus on avenues to increase revenues, especially in a post pandemic era. We all get that. However, it is important to remember that the commitment of the G20/OECD Inclusive Framework is to deliver a ‘consensus-based solution’ to the challenges arising from digitalisation. Therefore, we await the July meeting of G20 Finance Ministers and Central Bank Governors.”
The on-going OECD digitalisation initiative is a two-prong proposal to harmonise (a) a unified approach to the allocation of tax rights amongst countries where digital business takes place and, (b) a global minimum tax on all types of business.
Whilst negotiations are still continuing, BVI would like to have seen a greater acknowledgment of the positive contributions of international finance centres to the global economy.
Premier Fahie noted, “Economic research conducted on behalf of the BVI shows that International Finance Centres have a positive role to play in the global economy and actually help boost developing economies’ tax revenues by billions annually, support millions of jobs and enable significant trade across the globe.”
“Whilst we continue to monitor these developments, BVI remains confident of the attractiveness of its brand for international clientele and is keen to continue to support our client base whilst maintaining and expanding on our record as a responsible international financial centre. We will continue to monitor international initiatives and to be part of the discussions with the OECD, as a recognised standard setting body in this area.