Bahamas: Time for income tax?

By Scott Armstrong ~ Guardian Business Editor ~ scott@nasguard.com

twitter.com/guardianbiz:



While the news was being digested that The Bahamas was now back on the the international tax white list, one well-known financier called for the government to look again at the nation's tax structure.

Paul Moss, managing director of the financial services company Dominion Management Services Ltd, welcomed the news that The Bahamas had signed the 12 Tax Information Exchange Agreements (TIEAs) he warned that it would only be a question of time before the G20 and the OECD wanted more.

He said: "While the government should be congratulated for having acted appropriately to have the Bahamas removed off the grey list, it is a momentary victory as it will not be long before the OECD coming knocking again with more demands.

"When you give them an inch they take the proverbial mile and this is why I have called for the Bahamas to change its tax structure so that we could avoid these kinds of demands. We ought to now become proactive by introducing income tax with a low flat rate so we are no longer accused of being a tax heaven which makes us at the whim of the OECD.

"I am tired of saying it but sometimes you must repeat until our leaders get it. Only when we become a taxed jurisdiction (income tax) would we be left lone.

"Now is the perfect opportunity for us to engage in this dialog and seek to sign double taxation agreement with every country in the world if necessary.

"This is serious business and we cannot afford to continue to be reactionary in this regard. I now call on the professionals in private practice and the government to sit and maturely map out a new tax regime which will also have the desired affect of bring more money to the treasury as we as making it more equitable for the poor".



Thursday March 11, 2010

thenassauguardian

Bahamas Blog International

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

Bahamas Caribbean Blog International