PRESS RELEASE
GEORGE TOWN, Cayman Islands – Cayman Finance today is releasing a critical analysis of a new report by the Tax Justice Network, the State of Tax Justice 2021. TJN’s use of extremely distorted estimates and its failure to acknowledge the Cayman Islands’ tax neutrality and significant safeguards against tax evasion and aggressive tax avoidance have resulted in a report that is highly unreliable in its conclusions about the Cayman Islands financial services industry. As Cayman Finance research continues to demonstrate, TJN reports consistently lack credibility because of significant problems with their choice of data and application of methodology.
Cayman Finance’s new analytical report — “TJN’s State of Tax Justice: A Critical Review” – evaluates TJN’s State of Tax Justice Report for 2021 as well as the version previously released for 2020. Cayman Finance’s assessment was produced by noted economist Julian Morris and addresses both highly inaccurate estimates of corporate tax data as well as substantial errors in TJN’s reporting on the legal and regulatory environment in the Cayman Islands. Some criticisms of the Cayman Islands in the State of Tax Justice are 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 of using distorted estimates and inaccurate assessments to reach highly unreliable conclusions about the Cayman Islands,” said Jude Scott, the CEO of Cayman Finance. “Cayman Finance has once again produced a careful analysis that relies on credible research to document TJN’s efforts to manipulate data to produce pre-determined results. TJN’s reports like the State of Tax Justice and the Financial Secrecy Index cannot be taken seriously unless TJN begins to use more accurate data and reliable assumptions – and Cayman Finance will continue to shine a bright light on their work until they do.”
Cayman Finance’s research determined that TJN’s State of Tax Justice 2021 is based on:
“Extremely distorted estimates” – One of TJN’s own founders, Richard Murphy, concedes that: a) TJN uses BIS data that does not differentiate personal and corporate deposits; b) TJN fails to recognise ‘that there may be commercial reasons for some of these deposits despite this referring to the fact in the methodology note’ and c) Offshore holding is not necessarily for the purposes of tax abuse.
“Similarly shaky premises – TJN’s “own metrics for Banking secrecy show that Cayman is not a secrecy jurisdiction. Indeed, Cayman’s verified beneficial ownership registry combined with its tax information exchange agreements strongly disincentivizes individuals from attempting to use the jurisdiction to engage in tax evasion.”
Julian Morris, leading economist and author of the Cayman Finance report, explains further: “TJN uses erroneous methods to derive estimates of tax avoidance and evasion. As a result, it wildly exaggerates the extent of avoidance and evasion facilitated by Cayman. As long as TJN continues to use such erroneous methods, the State of Tax Justice cannot be relied upon as a credible assessment of the Cayman Islands.”
Cayman Finance’s “TJN’s State of Tax Justice: A Critical Review” by Julian Morris, as well as analyses of other TJN reports, can be found at www.caymanfinance.ky.
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About Cayman Finance:
Cayman Finance is the association of the financial services industry of the Cayman Islands, a premier global tax neutral financial hub efficiently connecting law abiding users and providers of investment capital and financing around the world. Cayman Finance represents first rate service providers within investment funds and asset management, banking, insurance, reinsurance, capital markets, and trusts sectors and world class fiduciary, legal, and public accounting service providers. Additionally, Cayman Finance represents 15 industry associations. Learn more at: www.caymanfinance.ky
About Jude Scott:
Jude Scott is a respected and recognised expert on global financial services and has served as CEO of Cayman Finance since 2014. He retired as an Audit Partner in 2008 after spending over 23 years with Ernst & Young and previously served as the Global CEO of Maples and Calder. Jude attained extensive experience within the Cayman Islands’ financial services industry, having served on various government and private sector committees, including: the Cayman Islands Financial Services Council; the Cayman Islands Society of Professional Accountants; the Education Council; the Insolvency Rules Committee; and the Stock Exchange.
About Julian Morris:
Julian Morris is an economist with over 25 years’ experience in think tanks and academia. A Senior Fellow at Reason Foundation, Senior Scholar at the International Center for Law and Economics, and Fellow of the Royal Society of Arts, he is the author of dozens of scholarly articles and the editor of several books. Julian’s work focuses on the role of political and legal institutions as they relate to entrepreneurship, innovation, and sustainable development. A graduate of Edinburgh University, Julian has Masters degrees from University College London and Cambridge University, and a law degree from the University of Westminster.
