NASSAU, BAHAMAS — Former Finance Minister K Peter Turnquest said yesterday that there is no reason for this nation to be alarmed over the G7’s landmark deal to battle tax avoidance, noting that this nation must adapt and develop strategies to get ahead of these developments.
G7 finance ministers last weekend agreed to a landmark deal to battle tax avoidance having agreed in principle that multinational companies pay a minimum tax rate of at least 15 percent in each country where they operate.
The East Grand Bahama MP addressed the deal during his 2021/2022 budget communication.
“Firstly, let me say that I believe that there is no reason for us to be alarmed as the statement issued is one of general agreement on an intention that still requires tremendous work and sign-off by the entire G20, after which, technicalities and time lines will have to be worked out,” Turnquest said.
“Make no mistake, however, that no matter how the final agreement ends up, it is likely to have some impact on the Bahamas and our international taxing obligations, if not domestic.”
He continued: “For those who continue to hold their heads in the sand believing that we will be able to continue as a non-taxing jurisdiction, I would only remind them that bank secrecy was also at one time an untouchable subject that has gone the way of the dodo bird.
“We need to adapt and to develop strategies to get ahead of these developments and exploit the opportunities that can be derived as a cooperating and globally compliant jurisdiction.”
Turnquest noted that Pillar 1 of the tax initiative, looks at taxing rights for digital services.
“At present all international digital services provided to consumers in the Bahamas are untaxed. If we were to assert our taxing rights over these transactions, it would represent new revenue,” said Turnquest.
“The second Pillar which envisions a minimum global corporate income tax of 15 percent is also an opportunity to modernize our existing corporate tax structure, which has been criticized for many years as unfair locally and internationally, and an impediment to business. With such a globally accepted minimum, the Bahamas could put itself in the game to attract large Multinational Corporations that are currently domiciled afar due to tax treaties.
Turnquest added: “We are close, enjoy dollar parity, stability, and a common business language, why not the Bahamas? I encourage everyone to see the glass half full and re-imagine the opportunities these developments can potentially bring, instead of the potential losses, which invariably will come anyway if we do nothing.”
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