Deputy Prime Minister and Minister of Finance Peter Turnquest said yesterday that the government intends to bring forth additional legislation to strengthen the financial services sector by the 2019/2020 budget debate and will also move to implement financial services sector legislation passed last year.
Turnquest’s comments follow revelations that The Bahamas has avoided being blacklisted as a tax haven by the European Union (EU) – a list it was included on last March.
“We recognize that there is still a lot of work to be done,” Turnquest told reporters outside Cabinet.
“Now we move into the implementation phase of all the legislation that we’ve put in place, which is going to require significant effort from a number of parties as well as from the industry.
“But, as we’ve demonstrated the whole of 2018, we are up to the challenge, and we are committed to doing what we have to do to ensure that the financial services industry is, in fact, protected.”
Over the last several months, the government passed several bills to help facilitate the cooperation of The Bahamas as a financial jurisdiction and curb harmful tax practices.
The bills include the Multinational Entities Financial Reporting Act, 2018; the Commercial Entities (Substance Requirements) Act, 2018; the Removal of Preferential Exemptions Act, 2018; and the Beneficial Ownership Act, 2018, among others.
The Ministry of Finance said yesterday that, while The Bahamas was not added to the list, the EU will continue to monitor the country along with the other jurisdictions as a part of its ongoing assessment of the effectiveness of the measures as time goes on and its process evolves.
Turnquest said, “I notice there’s some comments in the paper today with respect to this being just a temporary stay, if you will.
“We have no illusions that this is an industry that is very dynamic, that continues to move as regulations and standards move.
“We know that there are upcoming initiatives from the EU and the OECD with respect to taxation of digital transactions, for instance, harmonization of value-added tax rates and rules.
“There [are] also initiatives in respect to the potential for some kind of minimum taxation internationally.
“So, all of these are issues that are going to be confronting us in the year coming up, but our priority right now is to work on the implementation of all of the rules that we have, even as we plan and keep ahead of any developments that are coming.”
Asked about additional financial bills to be passed this year, Turnquest said, “There are still a few bits of legislation that we are looking at, and they should be coming through hopefully before the new budget year, but if not, probably included in the budget debate.”
The government and opposition have continually criticized the EU for moving its goal posts.
Asked whether the government is concerned that the EU will once again request more restrictions for the financial sector, Turnquest said, “Well, again, this is a very dynamic environment and things change as standards change; as the evolution of transactions and financial services products come about, there are different standards that come up to police those kinds of developments.
“And, so, I think it would be reasonable to expect that there will be further requirements as we go along.
“Again, the important thing is that The Bahamas is at the table and we are, in fact, participating in new discussions, so we are keeping abreast of the developments and not allowing ourselves to fall behind as we have in the past.”