NASSAU, Bahamas, Mar 12, CMC- The minority opposition Democratic National Alliance (DNA) Monday accused the European Union of shifting the goal post and urged the Bahamas government to develop a financial services growth action plan (FSGAP) to deal with the threats of being blacklisted as a tax haven country.
Turnquest, who is also the Deputy Prime Minister said that Nassau has learnt that the EU Code of Conduct Group (COCG) will be making a recommendation to the Council of the European Union this week to include The Bahamas on the EU List of non-cooperative jurisdictions for tax purposes.Finance Minister K Peter Turnquest said that the Hubert Minnis government is “disappointed” that the EU is moving to name the Caribbean Community (CARICOM) country as a tax haven later this week.
“Throughout this process, The Bahamas has consistently been engaged with the OECD (Organisation of Economic Cooperation and Development) and the COCG on the EU listing criteria – including as late as last week. Therefore, this latest move is particularly surprising to us,” Turnquest said in a statement.
DNA deputy leader, Arinthia S. Komolafe, in a statement said the recent announcement by the EU “is both surprising and disappointing.
“In the aftermath of the recent efforts made by the government to avoid the blacklisting of our nation, it is clear that the age-long practice of international and multilateral agencies continuously moving the goal post is still alive. The Bahamas dodged the proverbial bullet when the initial list was published in December 2017 due to the devastating storms that impacted the Caribbean in 2017,’ she said.
She said that since then the government has signed on to the Multilateral Convention on Mutual Administrative Assistance in Tax Matters and the Multilateral Competent Authority Agreement and also joined the Inclusive Framework on Base Erosion and Profit Shifting (BEPS) in December 2017.
“However, these actions have been presumably deemed inadequate by the COCG. Having addressed the criteria on Transparency and Anti-BEPS Measures, it remains unclear how the government intends to address the issue of Fair Taxation as highlighted by the EU.”
She said that it is unfortunate that external pressures “have put us in a position in which we are being compelled to address our system of taxation and chart the course for the financial services industry going forward.
“However, we have an opportunity to carry out comprehensive tax reform with due regard for the introduction of a more equitable and progressive tax system for our people,” she said, adding that tax reform should not result in an increase in the overall tax burden on Bahamians.
“The overall net effect of this reform should not complicate the ease of doing business or increase the cost of doing business in The Bahamas for Bahamian businesses. We are already burdened by several taxes, fees and levies without the necessary prudence, accountability or improved infrastructure to show taxpayers.
“Due consideration should be given to the reclassification or modification of existing taxes. A prime example is the business licence tax which is currently assessed on gross revenue rather than net profit.
“The evolving and shifting goal posts for compliance with international standards have nurtured a reactive rather than a proactive approach to our nation’s financial services industry over the years. We have found ourselves in survival mode rather than being strategic in planning for the repositioning of the financial services industry. It is time to turn this around for our own benefit.”
She said the DNA stands ready to assist in the formation of the FSGAP so as to “ensure financial services growth inclusive of the crafting of a fair and equitable system of taxation for Bahamians”.