Cayman NetNews on the Christian Aid report

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Cayman NetNews has published another of its stunning editorials, this time in response to the Christian Aid report.

Please do read it in full: it's well worth it. So much so I'm tempted to reproduce it in full, but I won't, restricting myself instead to the part in which they note Cayman's reaction to the challenge such reports pose:

Firmly entrenched in today's fiscal environment, tax havens are accepted as a fact of life. But there is a moral ambivalence surrounding them. Their purpose is to enable businesses and individuals to trade unencumbered by taxes and financial regulations, no matter what the merit of those taxes or regulations might be.

However, as might be expected, Tim Ridley, chairman of the Cayman Islands Monetary Authority (CIMA) went on record in March as saying that attacks on offshore financial centres (OFCs) for helping individuals and businesses in the world's major countries legally to reduce their tax liabilities are unwarranted.

Mr Ridley made the point that that paying tax is not a moral obligation. He also said that OFCs have a positive influence on the global economy, not a negative one.

Nevertheless, Mr Ridley recognises that, whilst OFCs such as the Cayman Islands face a challenge to win over their critics, he says it should not stop them from trying to educate the international community about their significant benefits.

We suspect that describing the situation as a challenge might now be seen as something of an understatement, given the series of recent negative events and publicity concerning the activities of tax havens in general and the Cayman Islands in particular.

This latest report may prove to be particularly damning in that it equates the tax revenues siphoned off by or through tax havens with mortality rates amongst the poor in developing countries.

Sooner or later more people are going to draw the parallel between the high standard of living enjoyed by Cayman residents with the grinding poverty found in other less well off countries that may be exacerbated by tax avoidance and/or evasion facilitated by the Cayman Islands.

What is said in the Christian Aid report may or may not be true. What Mr Ridley says may or may not be true. However, as someone once said, perception is paramount, reality is secondary.

We therefore wonder what, if anything, is being done to change the global perception of the Cayman Islands in the face of this mounting criticism and negative reporting.

They are brave, and appropriate words.

I've met Mr Ridley. I hope he is taking careful note. His attitude is unsustainable, and even his local press think so.