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Showing posts with label Tax Haven. Show all posts
Showing posts with label Tax Haven. Show all posts

Wednesday, December 15, 2010

Economic prosperity in The Bahamas and the Overseas Territories

By D. Markie Spring
Turks and Caicos Islands


The Bahamas and the overseas territories, especially the British Territories -- British Virgin Islands, Cayman Islands and the Turks and Caicos islands -- have always declined the idea of regional integration -- sometimes from an individual prospective and at times from governmental concerns.

In fact, The Bahamas is mostly dependent upon tourism to grow its economy. This country’s proximity to North America has placed it in an ideal position, which ignites, propels and escalates the tourism industry there. Furthermore, its tourism industry accounts for about 60 percent of the country’s gross domestic product (GDP), whilst other important sectors of the GDP, such as tax and the financial sectors, make up the other 40 percent of GDP.

The author of a number of published works, D. Markie Spring was born in St Vincent and the Grenadines and now resides in Providenciales in the Turks and Caicos Islands. He has an MBA from the University of Leicester, England, and a BA from Saint Mary's University, Canada 
Let me stress that, although the economy there seemed vibrant hitherto, in years to come The Bahamas tourism industry will not be able to sustain its economy. From an economic prospective, The Bahamas economy is not diverse enough for future sustainability.

Recently, the global economic downturn has resulted in the loss of thousands of jobs in The Bahamas alone. Because its economy relies heavily on visitors’ arrivals, which experienced a sharp decline, hoteliers were then forced to lay off workers. Some hotels had more employees than guests in-house.

The government of The Bahamas has an obligation to further diversify its economic environment through regional integration. When the tourism sector is affected, whether by natural disasters or by an act of terrorism or by challenges derived from social, environmental, political and economic factors, The Bahamas must be able to turn to an alternative sector for economic sustainability.

Similarly, the overseas territories -- especially Britain’s -- have also illustrated lack of support for regional integration. With much focus on the Cayman Islands, this country’s economy relies heavily on its humongous financial services industry, which is ranked fifth in the world’s banking centers. In addition, the government also piled up revenues from its taxation system. This together has placed the Cayman Islands at the top in the region, relative to the standard of living.

Looking at Cayman’s economic environment allows me to conclude, hitherto, that this country’s economy is not diverse enough to maintain viability in the long run. With the financial challenges faced by the United States and the European Union, the financial sector there is gravely affected.

Additionally, the Cayman Islands were forced to regulate its banking operations under the principles of the European Union Savings Directives (EUSD), coupled with intense pressure from the Organization for Economic Cooperation and Development (OECD) to prevent Cayman Islands’ offshore financial centers from becoming a tax haven. In addition to this, the current US president has disclosed his intention to exert severe pressure of the use of Cayman’s financial centers by multinational corporations.

Moreover, the International Monetary Fund (IMF) has set up programs that regulate the money laundering regime, and the country’s banking, securities and insurance industries. Similar environments exist in the other overseas territorial states.

Constructively, I looked at the lack of interest in regionalism from a Bahamian and from the prospective of the overseas territories and I understand the reason. Picturing the many people who would move from countries with weak economies and high unemployment rates to seek jobs in those places; figuring the movements of other Caribbean national – creating mass migration – I do understand. However, if the situation is being looked from a wider prospective then it should be known that there will be many benefits to gain and that rules and other stipulations will be in place, which would govern the movement of foreign citizens, such as having an assigned job before taking up residence in another country where more jobs are available.

The Bahamas and the Caymans Islands along with the other overseas states must join the rest of the Caribbean to integrate their efforts in making the Caribbean a region a region to reckon with. I stress that individually we won’t be able to sustain our economy and these countries’ economies are not diverse enough to stay strong for much longer. Some citizens purported that too many Caribbean countries are economically disabled to have successful integration; this does carry some concerns; however, the EU has successfully integrated with only the countries in Western Europe having strong economies.

Interestingly, the US, the world economic power, has established many regional bodies to enhance the country’s economic sector.

December 15, 2010

caribbeannewsnow

Monday, September 28, 2009

Bahamas Financial Services Board: Exit sparks offshore exodus fears

By INDERIA SAUNDERS ~ Guardian Business Reporter ~ inderia@nasguard.com:


The head of the Bahamas Financial Services Board (BFSB) is moving to allay concerns that The Bahamas will see a mass exodus of offshore banks on the heels of the pending exit of BNP Paribas.


It's a response sparked by that bank's decision to withdraw before the end of 2010 from countries gray listed by the OECD and viewed as "tax havens".


"It's a time of change and there will always be some amount of unsettlement in an industry of our size," Executive Director Wendy Warren told Guardian Business. "It's important to emphasize that government will maintain continuous dialogue with the industry... in the coming months The Bahamas will meet standards in a judicious matter."


Warren said she was unaware of any more banks that were preparing to follow in BNP's footsteps, asserting that it was mostly understood throughout the sector that The Bahamas is just months away from moving off the Organization for Economic Cooperation and Development (OECD) gray list.


A minimum number of 12 tax information exchange agreements (TIEAs) are required by a jurisdiction to satisfy the standard set by the OECD, which has now put pressure on "tax havens" for greater disclosures.


The Bahamas' current placing on the gray list is a primary reason why BNP CEO Pascal Dulau said the company has made the decision to exit the country.


"Despite its excellent financial performance in the current economic crisis, BNP Paribas has conducted a global review of its network in the context of the ongoing changes in the world financial system and G20 initiatives," said Dulau.


"In the light of this review, BNP Paribas has taken the decision to withdraw before the end of 2010 from countries grey listed by the OECD and viewed as tax havens.


"This includes The Bahamas."


According to Dulau, the bank was currently deciding the better of two options — either selling part of the business or transferring it to another jurisdiction. He did say, however, that the company had no fixed schedule for departure, saying it would depend largely on if they are able to "fix everything" before the end of 2010.


"In its exit strategy, BNP Paribas (Bahamas) Limited will preserve in the best manner the interest of its clients and 40 local staff members," he said. "As always, it is BNP Paribas' objective to act in this critical period as a responsible local and international player."


Dulau said there was no possibility to reverse the decision, even after The Bahamas moved off the gray list. Some local analysts indicate, however, that there is more to BNP's exit than the OECD's pressure.



September 28, 2009



thenassauguardian




Wednesday, September 23, 2009

Bahamas Tax Havens Struggle

BY KENDENO N. KNOWLES:


While the Bahamas is considered one of the original tax havens, one senior official at Deloitte & Touche said recently that The Bahamas has not reaped the maximum benefits like many other tax havens in the region.

Deloitte Managing Partner Raymond Winder said recently that The Bahamas has more or less flat lined compared to other Caribbean countries.

"We like to talk about this new model of business, but let us look at the financial services sector. We have never ever been a real big player in the financial service sector like some of the other tax havens," Mr. Winder said.

"Yes, the Bahamas was the original tax haven when you make a comparison against Grand Cayman and Bermuda but, let us look at what happens in Cayman and Bermuda, and just why they have benefited so much more from the financial services sector than we have.

"We have allowed the financial services sector in the Bahamas to be hijacked by the lawyers," he said.

The only players in the financial services sector Mr. Winder claimed are lawyers; this he said has been detrimental to the success of the financial services sector and by extension, tax havens.
"We feel as if all we have to do is incorporate corporations and there’s no more to it." Mr. Winder said.

Minister of State for Finance Zhivargo Laing however tried to set the record straight last week about the governments stand point.

Mr. Laing however said that it is the legal fraternity that is partly to blame.

"What I find interesting is that when the government listens we are blamed and when we don’t listen we are blamed," Mr. Laing said.

"With the greatest respect, this notion that Mr. Winder is talking about in terms of lawyers is an absolute policy of the legal establishment.

"I can tell you that I go to Geneva and I go to New York and I talk to fund administrators all over the world. I ask them why they set up their funds in Cayman and in St. Vincent. They [the fund administrators] say that their lawyers have international practices in Geneva and St. Vincent etc., but not in the Bahamas, because they say they cannot get in the Bahamas as easily.


"This is something where the legal fraternity will have to move," Mr. Laing said.



jonesbahamas