Palau is currently working with the European Union (EU) to be removed from the blacklist of tax havens the bloc adopted in December, according to Finance Minister Elbuchel Sadang.
Sadang said Palau “had the discussion with the European Union Ambassador to get Palau out from the list.”
He is hopeful that with the assistance of the Ambassador, Palau will be one the countries that will be delisted as tax havens.
He said the discussion was made with European Union Ambassador to Palau and the Pacific Ambassador Julian Wilson.
In April, Ambassador Wilson presented his credentials to the Vice President of Palau, Raynold Oilouch.
Palau remains on the blacklist along with American Samoa, Guam, Namibia, Samoa and Trinidad and Tobago.
Sadang said Palau was supposed to answer specific questions from the European Union prior to the blacklist, however, those queries were never answered because the report never reached his desk.
Earlier, President Remengesau Jr. said Palau have already instituted changes in its bank laws and has put in place laws that are in accordance with international standards on tax transparency.
“Not having the relevant laws in place doesn’t make us a tax haven. Palau doesn’t have the sophistication or has in place the laws, but the fact is that no one is avoiding taxes at home by coming to put their money in a bank in Palau,” Remengesau said.
The president said there are only five banks that are licensed to operate in Palau but three of these banks are U.S. FDIC registered banks.
“So that means that the banks are also under the watchful eye of the U.S banking regulators so definitely there’s a safeguard,” he noted.
While the two banks conduct their operations under the watchful eye of the Financial Institution Commission (FIC).
He, however, agrees that it is time to enhance Palau’s tax laws. (Bernadette H. Carreon)