Bahamas seeking to address tax erosion arising from digital and sharing economies
The Bahamas is joining the international tax community in trying to improve tax erosion arising from the digitization of the global economy and the rising sharing economy.
This was the focus of a recent Organization for Economic Co-operation and Development (OECD) global forum on value-added tax (VAT) in Melbourne, Australia attended by Deputy Prime Minister and Minister of Finance Peter Turnquest, which brought together policy makers and technical experts from around the world and focused on strategies to address the shifting policy and technical challenges to global VAT systems.
The sharing economy refers to the rise of entities like Airbnb, Uber or Lyft, where people may share a physical resource for some benefit.
Turnquest noted on the forum that, “It is clear that global developments and innovation in the digital and sharing economy in particular will impact The Bahamas’ retail and services sector and thus our tax. It already has to a large extent affected the Bahamas economy to a largely unknown extent, as we know the level of activity through Amazon and Airbnb, or the contracting of professional services such as architecture or engineering work that is provided offshore and sold to The Bahamas through digital means, which is creating an unfair advantage to foreign providers over local providers.”
In addition to addressing the use of technology to enhance VAT compliance, the global forum also explored how these developments can have an effect on international opportunities to share in the digital and sharing economy space, and for The Bahamas to be able to host such back office operations in the future.
“So, we’re looking at this not just as an erosion of our tax base, but also how we can use this to create new opportunities for us here to host these kinds of operations,” Turnquest said.
“Being a part of the creation of the discussions in this regard is particularly important as we seek to keep abreast of the developments in the international tax space and the policy implications, threats and opportunities that may arise.”
Paige started working as a business reporter in August 2016.
Education: Palm Beach Atlantic University in 2006 with a BA in Radio and Television News