Bethel: Bahamas won’t move on global corporate tax before rest of the world

With mounting calls for the government to be proactive and move ahead with establishing its own corporate tax before international bodies lay the hammer on them to do so, senior government officials said while discussions are ongoing, no decision will be made just yet.

Earlier this month, the government endorsed the Organisation for Economic Co-operation and Development’s (OECD) proposed G20/OECD Inclusive Framework on Base Erosion and Profit Shifting to reform the global taxation system, which calls for a global minimum corporate income tax with a minimum rate of at least 15 percent.

When asked if the government will adopt this rate before the end of the year, Attorney General Carl Bethel said on Wednesday, “We won’t make a move before the rest of the world does.”

Offshore financial centers like The Bahamas, which have zero or very low corporate taxes, stand to be impacted the most by the proposal. However, local financial experts have long called for The Bahamas to implement its own corporate tax before the heavy hand of global financial watchdogs forces this jurisdiction to do so.

Minister of Financial Services, Trade and Industry and Immigration Elsworth Johnson said in the coming weeks his ministry will take the question to the industry to determine the best route for The Bahamas.

“In terms of the OECD global corporate tax, we’ve had meetings with leading industry stakeholders on what we intend to do,” he said.

“I have spoken to the BFSB (Bahamas Financial Services Board), so along with the attorney general’s office and the Ministry of Finance, we’re going to go to the industry and have a meaningful dialogue to get feedback in terms of the way forward. That’s all I can say at this time.”

The changes would impact the vibrant but dwindling financial services sector, which has shrank year over year for the past five years.

Central Bank Governor John Rolle said earlier this month that stakeholders will have to look at how The Bahamas manages the need to be cooperative with global tax watchdogs while also finding a competitive channel to grow.

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