As the government is forced to do away with the systems that may have once made this financial jurisdiction attractive to international business companies (IBCs), it now has to evaluate new tax regimes in order to broaden the base that could be eroded as a result of the requirements handed down from the European Union (EU) and Organisation for Economic Development and Cooperation (OECD), for The Bahamas to ensure IBCs have economic substance in this country and that all of their substantial owners are known and listed. The jurisdiction also could be forced to eliminate upfront concessions for foreign investment projects in favor of more equitable models.
These points were made by Deputy Prime Minister and Minister of Finance Peter Turnquest, during the launch of HLB International’s executives conference, hosted this year by HLB Galanis & Co. Turnquest explained that The Bahamas will have to, and has begun the process of, removing preferential tax regimes for domestic versus foreign investments and exploring new forms of government revenue.
“Indeed, the advancement of the EU’s BEPS (Base Erosion and Profit Shifting)-inclusive framework and the OECD’s automatic exchange of tax information and harmful tax initiatives are making life very interesting for many jurisdictions around the world, particularly small financial centers like ours that rely on wealth management activities for a significant portion of GDP (gross domestic product) and for career growth for our talented pool of young professionals,” he said.
“Many countries are grappling with structural changes that are being forced upon them and finding the right mix of tax systems, rates and innovation to remain compliant with these global standard setters.”
Turnquest called the position The Bahamas and other jurisdictions are in due to the pressures of the EU and OECD “unenviable”, explaining that there is no escape from the discussion of taxes as this country moves into 2019.
“This topic will become the subject of what I’m sure will be contentious but hopefully constructive debate,” Turnquest said.
He added that The Bahamas must also consider “possible replacements to the business license fee structure; reducing customs duty over time, as we move towards participation in the World Trade Organization; and optimizing the rating scale for a number of existing taxes and fees, particularly where the fees do not cover the cost of operations, and where our revenue yield is below standard”.
Turnquest told the HLB International executives that the government has had to undertake myriad legislative reforms including the introduction of International Public Sector Accounting Standards and new charts of accounts, fiscal responsibility legislation, public financial management legislation, public debt management legislation and public procurement legislation.
Yesterday, legislation was tabled that will move forward many of the EU’s and OECD’s wishes for the financial services industry of The Bahamas.
Education: Florida International University, BS in Journalism
Latest posts by Chester Robards (see all)
- ‘We could actually get some things done’ - December 11, 2019
- BIRD responds to 4Mon Harbour Island community fund - December 11, 2019
- Govt considering keepingpreclearancefacilities in Florida - December 10, 2019