The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

THE Government is "fooling themselves" if they believe the Commercial Enterprises Bill is the magical solution to the financial services industry's woes, a local entrepreneur warned yesterday.

Paul Moss, Dominion Management Services' president, told Tribune Business that the Prime Minister and Brent Symonette were correct to brand the sector as "dying" - but only because they and their predecessors had failed to "shock it back to life".

Arguing that the Bill's 'fast track' work permit approvals process would have little impact by itself, Mr Moss reiterated his belief that the Bahamas' decline was rooted in its failure to shed its 'tax haven' image by adopting a low-rate corporate income tax.

He said he had been approached by many high-end clients wanting to do business in the Bahamas, but who were deterred by the "scrutiny" they knew this would attract from home country regulators and tax authorities.

And Mr Moss said the Bill's requirement that work permit applications in targeted industries be approved within 14 days only threatened to wreak "havoc" on an already over-burdened Immigration Department struggling to cope with its existing workload.

Responding to assertions by Dr Hubert Minnis and his minister of financial services that the sector was "dying", Mr Moss told Tribune Business: "I think that they are correct, notwithstanding what they think they're doing with this Commercial Enterprises Bill.

"It's dying because we have yet to address the big issues this country requires to survive and get off life support. It ought to be about double taxation agreements. The IMF has been saying that we need to adopt a low-rate corporate or income tax, but it's something they [the Government] refuse to address themselves.

"They can fool themselves all they want with this Bill, thinking it's going to fix a dying industry," Mr Moss continued. "It's not going to happen. This Bill has not moved us in any way. It requires real surgery, a technocrat or surgeon, who understands what needs to be done.

"The Bahamas is saying somehow that this Bill is going to be the 'be all and end all' for rescuing the industry. That is not the case. If the Bahamas wants to save this industry, it's not about relaxing the rules for work permits."

Mr Moss said that of the multiple challenges facing the financial services industry, the key was to shed the 'tax haven' label created by the Bahamas' clinging to its 'no tax' platform.

"We continue to hold ourselves out as a 'tax haven', and that is what the world is against," he added. "If they want people to come and headquarter here, they need to have arrangements for taxation so that companies from the US and Europe are not scrutinised by their regulators back home.

"No serious businessman is going to come here for his business to be scrutinised by his home country because of 'tax haven' status. Until that is addressed, they're 'whistling Dixie'. We have to get into the taxation business; we have to reposition for double taxation agreements.

"People won't do business in countries where they can't get tax benefits in their own country. I've had people wanting to conduct business in the Bahamas but, because there are no double taxation agreements, they don't come here."

Mr Moss continued: "When you attract world-class clients they want to be doing serious business; they want to come to a jurisdiction that is transparent and out in the open, and where scrutiny does not follow them.

"But now scrutiny follows the Bahamas, and that is why the Bahamas is dying. It's comatose, and they're [the Government] not doing anything to shock the patient back to life. They're assisting in the euthanasia of the industry by failing to address the issues with respect to taxation."

Mr Moss said the Government's lack of attention to the financial services industry was highlighted by the fact it was still trying to pass legislation to give effect to the Bahamas' commitment to the multilateral approach on automatic tax information exchange as set out in the Common Reporting Standard (CRS).

Returning to the Commercial Enterprises Bill, Mr Moss said the provision requiring that work permit applications be processed within 14 days otherwise they will be deemed 'approved' threatened to "create more havoc" at an already-struggling department.

Pointing out that the Immigration Department was hindered by staff shortages, its physical office conditions and the absence of information technology (IT), Mr Moss questioned why the Government still refused to tackle "the big elephant in the room" - the Department itself.

"They cannot deal with what they have in front of them now," Mr Moss added, recalling how many one-day work permits for persons flying into the Bahamas to attend Board meetings were only approved after they had left the country.