Small Island states that have adapted and prospered in the face of adversity
The concerted international drive towards greater tax transparency and the combating of tax evasion continues unabated. As part of a changing international regulatory landscape, various instruments and devices have been introduced to enhance tax cooperation. These are especially aimed at smaller jurisdictions that have made international financial services a mainstay of their economy, as part of a diversification strategy away from agriculture and to complement tourism. Perhaps the central tenet of this global tax reform process is the automatic exchange of information.
While some jurisdictions still have much to do to get their houses in order, others have embraced and shown commitment to these prevailing winds of the day as part of a drive to secure international regulatory, political and moral acceptance for their legitimate and force for good international financial services activities. Select small island IFCs have proactively gone over and above the call of duty, such that they ironically outperform across numerous indices many of those very countries seeking to make examples of them. The Cook Islands in the South Pacific is one such place. Belying its small size and remoteness and in stark contrast to the malign narrative ranged against it and others like it by those powerful political interests looking for a tax evasion scapegoat, its efforts on the compliance front are noteworthy.