EU and OECD: Wrong Impetus for Reform

  • Financial services under constant pressure

  • Agility of Government questioned

  • Long term strategy required for Financial Services

  • Domestic-driven comprehensive tax reform long overdue

  • Proper consultation and details required

The Bahamas' financial services industry has been under intense pressure over the last year. During this period, we have seen The Bahamas placed on adverse listings or blacklists by the European Union, Organization for Economic Cooperation and Development (OECD), Financial Action Task Force (FATF), United Kingdom, United States of America and The Netherlands.

Observers of the global landscape for financial services are aware that the second pillar of the Bahamian economy has been under assault for over two decades with the goal posts for compliance being moved constantly and continuously. The end goal of the implementation of new standards and placement of additional hurdles for International Financial Centres like The Bahamas seems apparent to industry professionals.

This could not have been more obvious than the Netherlands' recent inclusion of The Bahamas on a blacklist of tax havens with no corporate tax or corporate tax rates lower than 9%. This took place while the Government was working around the clock to implement sweeping changes to our tax system in order to meet an EU imposed deadline. The Netherlands Government in this instance, indicated that the list was subject to consultation from 25 September to 22 October 2018. It is concerning that adverse listings of this nature and other blacklisting initiatives often catch the Government by surprise. This raises questions about our level of engagement and the agility of relevant government ministries or agencies in keeping up with global trends and initiatives.

It is time for the Government to wake up to the reality that the pressures will not cease, and the goal posts will continue to shift. A reactive approach to new standards set by international bodies and other jurisdictions is myopic and demonstrates a lack of a long term plan or vision for the financial services industry and the Bahamian economy as a whole.

Long overdue reforms that are required to usher The Bahamas into the 21st century cannot be ignored or delayed until external pressures force the Government into these initiatives. The recent press release on financial sector reform is a prime example of this phenomenon. We have once again kicked the proverbial can of comprehensive tax reform down the road thereby ignoring the need to move from the current regressive tax system to a more progressive and equitable one. The current system places undue and unfair burden on the working and middle class as well as those who can least afford it.

While some clarity has been provided on the basis for the calculation of business license tax with a link to positively rated taxable supplies, it does not address the main concern of the business community that the tax is imposed on turnover rather than profits. This is especially relevant for high turnover and low margin businesses.

It is imperative that the actual details underlying the proposed changes to our tax regime are provided to stakeholders and the public for scrutiny and feedback. We urge the Government not to shove this down the throats of domestic entities in the same manner as the significant increase in the VAT rate. There must be transparency and disclosure in relation to the criteria for determining the proposed new taxes and/or fees.

We welcome any initiative aimed at reducing the cost of doing business and improving the ease of doing business in The Bahamas. It is our hope that the Government's agenda and priorities will someday not be dictated or determined by external factors but rather a coherent vision which has at its core the best interest of the Bahamian people.

Arinthia S. Komolafe

Deputy Leader, Democratic National Alliance


Campaign finance reform long overdue

  • PLP and FNM have avoided reform for decades

  • Curious timing following NPO Bill backlash

  • Robust legislation will reveal special interests

  • No further delay to passage of legislation

The Democratic National Alliance (DNA) notes the comments attributed to the Attorney General that a draft bill seeking to regulate the financing of campaigns for political parties in The Bahamas.

This announcement comes on the heels of significant pushback and backlash following the tabling of the Non-Profit Organizations (NPOs) legislation. The legitimate concern of the populace that political parties just like NPOs should not be exempt from scrutiny seems to have forced the Government to finally propose campaign finance legislation.

We believe that it is extremely important that the Bahamian people are aware of the sources of funding for political organizations. The legislative and policy priorities of successive administrations upon assuming office point to an obvious need for transparency and accountability in the campaign finance process. An effective campaign finance legal framework will reveal special interests and groupings that may seek repayments in favours, contracts and appointments from political parties following election victories.

The discourse on campaign finance regulation has been taking place in The Bahamas for decades without any meaningful progress by the Progressive Liberal Party and Free National Movement administrations to date. Campaign finance reform in The Bahamas is long overdue and should not be delayed any further.


While it can be argued that the Government’s recent pronouncement is only an attempt to placate the Bahamas Christian Council, NPOs and the Bahamian people, we are hopeful that this is not another grandiose announcement without any intention to implement this vital framework. The Bahamian people deserve and urgently demand good governance from an administration that promised that it would be “the people’s time”.

We implore the Government to proceed with completing the drafting, tabling and passing of the legislation without any further delay and pray that this crucial legislation does not meet the same fate as the Freedom of Information Act, which has been put on the proverbial backburner. Campaign Finance reform has been at the heart of the DNA’s platform for good governance and the DNA looks forward to providing valuable input into the draft legislation and working with the Government to complete this process as soon as possible.

Arinthia S. Komolafe

Deputy Leader, Democratic National Alliance

DNA extends condolences on the passing of Bradley Roberts

We are saddened to hear of the passing of the Honourable Bradley Roberts.

Big Bad Brad as he was fondly called in the political arena was an astute politician who served as a Parliamentarian, Cabinet Minister and National Chairman of the Progressive Liberal Party. He also served in various capacities on statutory boards and government agencies.

Mr. Roberts was also a historian in his own right and no doubt contributed to the development of our nation and democracy. Many regarded him as a repository of Bahamian political history and a political strategist. While many viewed Mr. Roberts as a polarizing figure in Bahamian politics, he will be remembered as a courageous and passionate wordsmith who loved his country


We salute him for his national service and dedication over the years.

On behalf of the Democratic National Alliance, we offer our deepest condolences to the Roberts family, friends and former colleagues. Our thoughts and prayers are with them during this difficult time.

May his soul rest in peace.

Arinthia S. Komolafe

Deputy Leader, Democratic National Alliance



Approach to OECD list must go beyond semantics

The Bahamas and twenty other countries were recently singled out by the Organization for Economic Co-operation and Development (OECD) on the premise that their residence by investment (RBI) and citizenship by investment (CBI) schemes pose a high risk to the integrity of the Common Reporting Standard (CRS) regime. This adverse listing followed the analysis of over 100 CBI/RBI schemes by the OECD.

In what was termed as the clamping down on CRS avoidance through CBI/RBI, the OECD asserted that it is seeking to equip financial institutions with tools to help them identify accountholders that may misuse RBI/CBI schemes specifically to avoid the CRS. We submit that this is another classic case of the moving of the proverbial goal posts by international organizations.

The Government must now move beyond the semantics and address this issue for what it really is. The reality is that only 21 out of over 100 countries were placed on this list for high risk CBI/RBI schemes. While the use of the word “blacklist” may be inappropriate or frowned upon, the list is not a positive, complimentary or favorable one.

As part of the OECD guidance, financial institutions are being asked to consider the results of the OECD’s CBI/RBI risk analysis and whether an accountholder has residence in a jurisdiction offering a potentially high-risk CBI/RBI scheme. This equates potentially to additional scrutiny and enhanced due diligence on legitimate economic permanent residents of The Bahamas.

We note that since the release of the guidance, the OECD has issued a statement in which it was asserted that Monaco’s residence and immigration requirements do not pose risks to the integrity of the CRS. This followed the provision of additional information by Monaco and it is expected that the guidance/list will be updated to reflect this.

The Government has an obligation to ensure that the OECD is made aware of the robust and rigorous process in place for the granting and maintenance of economic permanent residence by individuals. This includes a comprehensive due diligence and vetting process to ensure the fitness and propriety of all applicants.

The economic permanent resident programme and second home market are well regulated and pivotal to our economy. It impacts the real estate, financial services, tourism and government sectors with contributions to our nation’s Gross Domestic Product.

We need effective representation and diplomatic collaboration to address this latest attack on our nation’s economy. It is simply unfair and unacceptable for the OECD to place The Bahamas on any adverse list despite our demonstrated commitment to meeting our international obligations.

Arinthia S. Komolafe, Deputy Leader

Democratic National Alliance