PORT TAXES IN THE REGION should be removed in another seven years, and an American tax expert is predicting those taxes will be shifted to other areas of the economy.

Bruce Zagaris, who has been analysing CARIFORUM's (CARICOM and Dominican Republic) Economic Partnership Agreement (EPA) with the European Union (EU), said: "In seven years, CARIFORUM governments must eliminate 'other duties and taxes charges' that are a major source of government revenue at their ports."

Zagaris, an American attorney-at-law who once lectured in the University of the West Indies Law Faculty, Cave Hill, revealed aspects of the EPA agreement in a paper co-authored by Elena Papangelopoulou.

The document, An Overview Of The CARIFORUM-EC Economic Partnership Agreement, said: "Once the border duties and charges on imports are phased out, they will be replaced by increases in income tax, government sales taxes, and the introduction of new tax measures."

Citing Article 14, Part Two of the EPA agreement, he said: "The agreement provides for cooperation regarding fiscal reforms with a view to shifting dependence from tariff and other duties and charges to other forms of indirect taxation."

Zagaris and Papangelopoulou said that "CARIFORUM countries will [therefore] undergo significant transformations in tax policy", adding: "Already several CARIFORUM countries in the last few years have installed VAT [value added tax]."

Zagaris, at a recent Society of Trust and Estate Practitioners (STEP) forum in Barbados, encouraged STEP and the Barbados International Business Association to begin working on extracting benefits from the services aspects of the EPA agreement. (SR)