The Bahamas is set face blacklisting by the European Union this week as a suspected tax haven. The decision comes roughly three months after the EU placed The Bahamas and seven other jurisdictions that were impacted “badly” by hurricanes last summer on watch.
The EU said that these jurisdictions, which were given special consideration, had been given until early 2018 to respond to the EU’s concerns.
“The Progressive Liberal Party (PLP), like the minister of finance, is disappointed in this development, if not entirely surprised,” Cooper said in a statement.
“The government previously assured that it had staved off this move by the EU. The shifting goal posts of the Organisation for Economic Cooperation and Development (OECD) and the illusory criteria the EU Code of Conduct Group (COCG) have imposed without giving The Bahamas any real voice are a threat to our livelihood.
“It is mind-boggling that all that has been done by The Bahamas in recent years is not enough to satisfy these international bodies. But there can be no question that the national interests in the security of The Bahamas’ offshore financial center are paramount.
“And the PLP is sincerely interested in helping the government navigate the process of delisting and will avail ourselves for consultation and to pass emergency legislation, if required, to adequately respond to this attack.”
Finance Minister, K Peter 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.
“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.
He said the government is drafting legislation and that discussions were held with the secretary general of the COCG responding to their concerns.
“We believe the discussions were positive and remain hopeful that our efforts to address their concerns will result in the favorable consideration of The Bahamas as a cooperative tax jurisdiction,” Turnquest said.
However, Cooper insisted yesterday, that while delisting should be a national priority, it is also not enough, noting that the international bodies will likely move their goal posts again.
“What is needed is a proactive course of action and a national non-partisan plan to improve ease of doing business and to create incentives for real international business to create economic substance in The Bahamas,” he said.
“Meaningful consultation with industry stakeholders, particularly The Bahamas Financial Services Board, and the opposition on these issues is a must.
“Waiting for the OECD, and now the EU, to come up with further hoops for us to jump through will not do. We must also have a comprehensive approach to economic growth by generating better financial conditions in which entrepreneurs can thrive.”
Cooper once again pointed to the need for a local economic czar, more and easier access to banking services, deeper investment in food security through local private-public partnerships, wealth creation and local and foreign investment in expanding industries in which more Bahamians can participate, in order to ensure the sound financial future of The Bahamas.
Several bills were passed in Parliament last year to help facilitate the cooperation of The Bahamas as a financial jurisdiction.
These bills included the Automatic Exchange of Financial Account Information Amendment Bill, 2017; Automatic Exchange of Financial Account Information Amendment Regulations, 2017, and the International Tax Cooperation Amendment Bill, 2017.
According to a report from Reuters, the U.S. Virgin Islands and Saint Kitts and Nevis are also set to be added next week to a European Union blacklist of tax havens.
Some states on the blacklist include Barbados, Grenada, Panama, Trinidad and Tobago, St. Lucia, Samoa and Tunisia.
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