AG: Bahamas compliant with OECD’s MAP peer review process
The Bahamas is fully compliant with the Organisation for Economic Co-operation and Development’s (OECD) Mutual Agreement Protocol (MAP) peer review and monitoring process which is currently underway.
The peer review, which is a part of the base erosion and profit shifting (BEPS) action plan, examines every jurisdiction within the OECD to check for harmful tax practices.
“What they do is they look at every single jurisdiction of the main countries in the OECD, on the basis of giving special exemptions to these people to cause their taxpayers to migrate to those countries,” Attorney General Carl Bethel told Guardian Business.
“We are full participants in this inclusive forum to deal with the issue of harmful tax practices. The Bahamas is fully compliant with this process and fully engaged with this process.
“What will happen is after they do the peer review they will analyze every single law we have that has any kind of financial impact, to determine whether we have in the crafting of the laws sought to create a special competitive space that would in their view would unfairly compete with their tax base.”
The Bahamas’ financial services sector has been under heavy scrutiny by international regulators over the past two years in particular.
In its last Quarterly Economic Review for March, the Central Bank of The Bahamas pointed to employment retrenchment in the international banking sector, that has come as a result of tax transparency requirements which have exacerbated operating cost pressures and caused both the repositioning of business outside the jurisdiction and significant outsourcing of support for the remaining operations.
“They’re designed for one reason, but we do suspect that there are ulterior motives in the sense that the imposition of these things poses a competitive challenge to the industry,” Bethel said when asked about the impact of the regulations.
“Throughout the world, all financial centers and even mature economies that are not directly involved but may have a financial sector active in their overall economy, are faced with increased costs, hurdles, administrative challenges posed by these regulations and it does pose a competitive challenge…but that is the economy in which we must operate.
It is of course on us to both be fully compliant but also to be competitive within that compliance.”