The article reports on TCI's removal from the G20's "grey list" of countries that don't comply with international tax transparency standards. This would appear to be a huge step in the direction of cleaning up the country's reputation for corruption and shady dealings. And, indeed, a spokesperson for the Governor is quoted as saying just that. But it appears it took considerable arm twisting to get this far - according to the article, the recent actions leading to TCI's removal from the list came just weeks before threatened sanctions were scheduled to take effect.
What does it take to get off the G20 grey list, anyway? A listed country must sign a minimum of 12 Tax Information Exchange Agreements (TIEAs) to be removed. Is it any surprise that TCI has signed on to exactly that number, including ones with the likes of Greenland and the Faroe Islands (population 50,000)? I guess there might be some Inuit seal hunters or dogsled runners that are going to have to find somewhere else to hide their unbounding wealth. To be fair, the twelve agreements do include the UK, France, and the Scandanavian countries, and there are plans to sign agreements with several other wealthy countries. Notably, however, there is no agreement in place (and no indication is given of plans for one) with the United States, which according to the article loses "around $100 billion each year due to offshore tax evasion."
Evidence of this kind of dirty money passing though the Turks and Caicos is everywhere. I'd be willing to bet that much of the luxury tourism on Provo is a byproduct of such tax evasion. How so? Let's suppose you have a large amount of taxable assets in the United States. And even if you paid the most crafty accountants to find all loop holes in the tax code, you'd still owe the government 25% of it. So look to the Turks and Caicos for some place to hide your assets. An unscrupulous banker here in the Islands would gladly help you to find "investment" opportunities - a new luxury resort, for example. You move enough capital into a Turks and Caicos account to fund the development. On paper the development might cost $5 million. In reality maybe it only cost $2 million. The remaining $3 million can then be moved into secret accounts that the IRS can't track. If the tax evader then wants access to that money without it being linked to his or her devious activities, that money must be laundered. At this point it is simple, fudge the books a little and hide the money in the returns coming back on the tourism investment. That extra cash can then be used to buy something nice like a yacht.
When I start thinking about all this it makes me sick. When I'm in Provo I can't help but think everybody around me is a tax cheat, fraud, and the sort of person responsible for the recent economic collapse. Excess isn't enough for these people. They'll take everything they can get, and when it all comes crashing down, it's the honest laborer that suffers the most.