Cayman Finance Says TJN State of Tax Report Is Based on Flawed Analysis
Cayman Finance is today releasing a critical analysis of a new Tax Justice Network (TJN) report, State of Tax Justice 2021.
“TJN’s use of grossly skewed estimates and its failure to recognize the Cayman Islands’ fiscal neutrality and important safeguards against tax evasion and aggressive tax avoidance resulted in a very unreliable report in its findings on the Cayman Islands financial services sector, ”Cayman said. Finance said in a statement.
“As Cayman Finance’s research continues to demonstrate, TJN’s reports consistently lack credibility due to significant issues with the choice of data and the application of methodology,” the statement added.
Cayman Finance’s new analytical report, “TJN’s State of Tax Justice: A Critical Review,” assesses TJN’s State of Tax Justice report for 2021 as well as the previously released version for 2020.
Cayman Finance’s assessment was produced by renowned economist Julian Morris and covers “both very inaccurate estimates of corporate tax data as well as substantial errors in TJN’s reports on the islands legal and regulatory environment Caymans, “the statement said.
He added, “Some criticism of the Cayman Islands in the Tax Justice State is recycled from TJN’s Financial Secrecy Index, which Cayman Finance dismantled in a previous report.”
“The State of Tax Justice report continues the Tax Justice Network’s record by using distorted estimates and inaccurate valuations to reach very unreliable conclusions about the Cayman Islands,” said Jude Scott, CEO of Cayman Finance.
“Cayman Finance has once again produced careful analysis that draws on credible research to document TJN’s efforts to manipulate data to produce predetermined results. TJN reports such as the State of Tax Justice and Financial Secrecy Index cannot be taken using more precise data and reliable assumptions – and Cayman Finance will continue to shed light on its work until such time. ‘he does it,’ Scott added.
Cayman Finance said its research determined that TJN’s State of Tax Justice 2021 is based on:
- Heavily flawed estimates: One of the founders of TJN, Richard Murphy, concedes that: a) TJN uses BIS data that does not differentiate between personal and business deposits; b) TJN does not recognize “that there may be commercial reasons for some of these deposits despite this with reference to the fact in the methodological note” and c) The detention abroad is not necessarily for the purpose of tax abuse.
- Likewise, fragile premises: TJN’s “own measures for banking secrecy show that the Caymans are not a secret jurisdiction. Indeed, Cayman’s verified beneficial ownership register, combined with its tax information exchange agreements, strongly deters individuals from attempting to use the jurisdiction to engage in tax evasion.
Julian Morris, leading economist and author of the Cayman Finance report, further explains: “TJN uses flawed methods to calculate estimates of tax avoidance and evasion. TJN continues to use such flawed methods, the State Tax Justice cannot be relied on as a credible assessment of the Cayman Islands. “
Cayman Finance’s TJN State of Tax Justice: A Critical Review of Julian Morris, as well as analysis of other TJN reports, can be found at www.caymanfinance.ky.