Caribbean Countries Cautioned to Coordinate Tax Incentives

Caribbean countries will have to look at coordinating tax incentives when attracting foreign investment as a means of addressing issues of economic growth. That’s the view of Economic Professor Dr. Nouriel Roubini.

He was addressing finance officials of various Caribbean countries at a High Level Caribbean Forum organized by the International Monetary Fund (IMF). “The key thing is try to coordinate to make sure there is no kind of free riding. That might be easier said than done,” Dr. Roubini said.

He explained that tax incentives might work for small islands seeking to attract some large scale investment. He noted though that the level of business from these investments must compensate for the incentives. “There is a significant amount of waste and inefficiency and even these countries that are energy imported, they can do much more in terms of reducing the inefficiency,” Dr. Roubini said.  

Dr. Roubini highlighted the challenges to economic growth in the Caribbean and how developments in the developed and emerging markets can impact growth in the region. A tax regime for investment was one of the topics debated at the forum where officials debated whether the merit of Caribbean countries offering tax incentives to potential investors.

In addition to regulating tax incentives, Dr. Roubini also made a case for Caribbean countries to become more energy efficient as the cost of energy is a major impediment to economic growth.

The professor also called on Caribbean countries to diversify their economies and not rely solely on tourism in the case of the tourism dependent countries.  He however acknowledged that diversification can be difficult but can be achieved through economic integration.

Source: winnfm.com