Bahamas remains on grey list
Strategic not myopic approach to financial services
New standard imminent and inevitable
Government kicking can down the road
Time to govern for Bahamians
The recent announcement by the European Union (EU) that The Bahamas remains on its grey list and has not been blacklisted is a welcomed development. This follows the removal of The Bahamas from the EU blacklist to the grey list in May 2018 after the government made several commitments to carry out reforms.
While the temptation to embark on celebratory exercises and seek political brownie points may seem attractive to the government, it would be prudent not to do so. In reality, The Bahamas’ status as a country on the EU grey list has not changed since May 2018.
According to the European Commission, 25 countries from the original screening process have been cleared; The Bahamas is not one of those countries. The Bahamas remains on a grey list of countries that will continue to be monitored in 2019 and is listed among 34 jurisdictions that have already taken steps to comply with the requirements under the EU listing process. The EU has directed that jurisdictions on this list must complete this work by the end of 2019, to avoid being blacklisted next year.
The Democratic National Alliance (DNA) reiterates that the current administration continues to adopt a myopic approach to the second pillar of our economy. The government has taken the view that the avoidance and removal from adverse listings by international agencies is their priority over developing a growth action plan for the industry. They are squandering an opportunity to truly govern for the Bahamian people by rebranding, refocusing and reviving the financial services industry.
As we have seen in times past, the goal posts will continue to shift as new standards will be established to undermine the value proposition of The Bahamas as an International Financial Centre (IFC). It would be naïve for the government not to realize that the next standard or hurdle is imminent and inevitable. We submit that it is even more egregious for the government to adopt a reactive approach and kick the proverbial can of comprehensive tax reform down the road. It is an open secret that the ultimate goal of certain global organizations is the demise of the Bahamas' financial services industry. The government cannot be complicit in this endeavor by continuing to capitulate to the extra territorial demands of multilateral bodies until we have no financial services business to regulate.
The discussion about a global taxation standard has commenced and it is only a matter of time before this becomes the new agenda. In the interim, The Bahamas must be proactive and strategic in shedding the tax haven label while articulating a vision for the future of our financial services industry.
It is common knowledge that we have a tax system that is regressive and oppressive to the detriment of the masses. The middle class and vulnerable in society bear the brunt of the tax burden imposed by a government that has worsened the misery index. The question on the lips of Bahamians is when will this FNM administration start governing for them rather than special interest groups and international agencies?
Arinthia S. Komolafe, Leader
Democratic National Alliance