The Ministry of Finance (MOF) is assessing what impact the G7 nations’ proposed global tax reform, namely the move to introduce a global minimum corporate tax rate for multinational entities, will have on The Bahamas and its financial services sector, the MOF noted in a statement yesterday.
The statement explained that the G7 made its decision on Friday to move forward on the minimum corporate tax rate.
It also explained that The Bahamas will maintain its “sovereign right to determine the tax structure best suited for the ongoing development of the country”.
It added that this country has been part of the ongoing discussions on shifting global tax measures since 2018.
“Not only is The Bahamas a member of the Inclusive Framework on BEPS (Base Erosion and Profit Shifting), but the country also has representation on the Steering Group with the election of Stephen Coakley-Wells of the Ministry of Finance to the Steering Group last year,” the statement noted.
“The discussion on reforming the international taxing structure for multinational entities is being directed by the 24-member OECD/G20 Steering Group of the Inclusive Framework on Base Erosion and Profit Shifting.
“Notwithstanding agreement by the G7, the framework proposed by the Steering Group will require the consensus of the 139 countries of the Inclusive Framework on BEPS before going on to the G20 finance ministers for ratification later this year.”
The statement noted that the issue of tax adjustments is a timely one given that Prime Minister Dr. Hubert Minnis, in his 2021/2022 budget speech, outlined the government’s undertaking of a comprehensive study of the country’s tax structure.
“The output of this in-depth, empirical assessment will inform ongoing tax reform efforts in pursuit of greater fairness and equity within the country’s tax regime,” the statement pointed out.
The MOF stated it will retain a proactive stance as global financial sector and tax watchdogs make their moves, so as to ensure the survival of The Bahamas’ financial services sector.
It explained that it will use the country’s representation within the Steering Group to ensure jurisdictions like The Bahamas are protected.
“The government will ensure that the positions of tax jurisdictions like The Bahamas are ventilated and considered,” the statement noted.
“At the same time, the government will work with industry stakeholders to ensure that the jurisdiction is poised to take advantage of whatever opportunities arise from any changes to the international taxation architecture.”