Corporate Tax

Bahamas Tax System: “Full Scope” for Enterprise Abuse

BY NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A Bahamian financial services firm said yesterday that the country is failing to “take the bull by the horns” after being ranked the 12th most harmful tax haven in the world.

Paul Moss, president of Dominion Management Services, told Tribune Business that the Bahamas were “wasting time” introducing the lowest corporate income tax rate on the rankings of the Anti-International Financial Center (IFC) group, the Tax Justice Network. another reminder of the direction this nation and its competitors are being pushed.

The Corporate Tax Haven Index, which the Tax Justice Network identified as “a ranking of the jurisdictions most contributing to multinational corporations underpaying corporate tax,” placed the Bahamas well in the top three of its Caribbean rival, the British Virgin Islands (BVI)), the Cayman Islands, and Bermuda in that order.

The Netherlands, which ironically blacklisted the Bahamas for having a zero corporate tax rate, ranked fourth, while Switzerland, Luxembourg, Hong Kong, Jersey, Singapore, the United Arab Emirates, and Ireland were seen as more harmful than this nation that took a place ahead of the United States.

The Bahamas, which the Tax Justice Network claimed to be “responsible for 3.28 percent of the world’s risks of corporate tax abuse,” suffered from the absence of any personal or corporate income taxes. The Index argued that this provides “unlimited scope” for corporate tax abuse.

Mr Moss said the index provides further evidence of the direction the world is headed and the need for the Bahamas to proactively position itself ahead of future regulatory and tax initiatives by putting in place a corporate tax system designed for its own ends rather than having it imposed from outside.

Mr Moss opposed the government stance as formulated by the attorney general, Carl Bethel QC, and waits to see international consensus on corporate taxation emerge. He told the newspaper: “We are in a life raft with no one out at sea. Coming to our rescue, no support, but there are things we can do to improve our situation.

“We hesitate, waste time, and hope it’s all gone, but it’s going nowhere.” Commenting on Bethel’s position, he added, “This is a typical response. It won’t go ahead and take the Taurus by the horns and make a decision to alleviate the situation, be progressive, and stick with financial services.

“Every day since 200, the first blacklist, they have [the EU and OECD] ate at financial services. Here we are 21 years later. You will be back. There is no escape my brother. We are really missing out on the opportunity here to put something down for ourselves instead of being forced into what will not be sustainable for us.

“The writing was on the wall for us. We bury our heads in the sand and then surrender, and surrender will come to our own disadvantage in the end if there is no financial services industry. “

While some have argued that the lowest corporate tax rate will deter financial services customers by turning the industry’s long-established business model on its head, Mr. Moss argued that it “will have the opposite effect.”

“It can drive customers to the Bahamas,” he told the newspaper. “There will be more transparency and openness, and people will want to be in the Bahamas as a jurisdiction. It won’t lead people; it will attract people. This is not a sucker; This is tax competition. It will bring the transparency that we have been striving for. “

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