NASSAU, BAHAMAS — Total taxes and fees collected by the government from the financial sector last year increased by 15 percent to just under $200 million, according to the Central Bank.
The bank noted the total number of banks and trust companies licensed in The Bahamas decreased further by 3 to 214.
The findings were included in the bank’s analysis of the gross economic contribution of the financial sector in 2021.
The bank said: “An analysis of the financial sector performance showed that total taxes and fees collected by the Government increased by 15.1 percent to $189.2 million in 2021. Underlying this development, transactional taxes on domestic intermediation activities rose by 19.2 percent to $112.0 million, largely attributed to the growth in taxes on banking transactions (30.2 percent) and insurance premium taxes (5 percent).
“Further, license and registration fees rose by 9.6 percent to $77.2 million, underpinned by a 25.7 percent rise in collections from investment funds (11.2 percent of the total) and 10.6 percent from international business companies (17.4 percent of the total). In addition, receivables from banks and trust companies (68.5 percent of the total) grew by 4.6 percent, while collections from financial and corporate service providers surged to $1.9 million from $0.5 million in 2021.”
The financial services sector accounts for approximately 10-15 percent of the country’s gross domestic product.
The Central Bank noted that data from The Bahamas’ financial services sector 2021 survey suggests that the sector “continued to face headwinds, with global regulatory standards and efficiency pressures impacting balance sheet and operations consolidation”.
“Specifically, the international sector continues to adjust to heightened standards for tax cooperation, anti-money laundering (AML), counter financing of terrorism (CFT), and anti-proliferation. Further, amid reducing levels of employment, the international sector has settled towards re-domiciling clients and operations to emerging lucrative opportunities outside of North America and Europe.
“During 2021, the estimated balance sheet size of financial sector operations decreased, shown by a falloff in assets holdings within the banking sector. In particular, on balance sheet assets contracted by approximately $23 billion (13.3 percent) to $149.8 billion, as the reduction in international banks assets, outweighed the gains in domestic banks assets,” the Central Bank noted.
According to the regulator, the total number of banks and trust companies licensed in The Bahamas decreased by 3 to 214 in 2021, following a reduction of 4 in 2020.
“Public banks and trust companies reduced by 4 to 80, while restricted, non-active and nominees increased by 1 to 134,” it read.
“Public institutions providing an arrangement of domestic and international services included 48 Bahamian incorporated entities and 12 euro-currency branches of foreign banks operating inside The Bahamas.
“Further, there were 20 authorized dealers and agents, which comprised of 11 authorized agents (resident trust companies) and 9 authorized dealers (commercial banks)—inclusive of 7 clearing banks.”
