The Tribune

EDITOR, The Tribune

I have just finished reading a book called Moneyland by investigative journalist Oliver Bullough. The second last chapter is entitled Tax Heaven USA. The cover on the book says “Why thieves & crooks now rule the world and how to take it back”.

It is an interesting read but I would like to concentrate on the chapter above, Tax Heaven USA. Of course it covers how crooks hide and use money in Moneyland around the world, and how it is much simpler now than a few years ago with internet banking. In the Caribbean, Nevis features frequently in the book and the Prime Minister explained to Bullough how important the financial services industry and selling citizenships is to their economy and without these products they would not be able to exist. He condemned the US for forcing them to sign up to various treaties which the US themselves do not observe. The Bahamas features only twice in the book but that is not the point.

We read in the local papers every so often about the “Black List” that the Financial Services Industry is escaping from or being placed on and we are permanently faced with the possibility that if it is put on or is on the “Black List” and if nothing is done it will eventually mean no transactions can be made in US dollars or probably any other currency because no mainstream foreign banks will deal with us. That would be tragic and is a constant threat. In order to stay “clean” our financial services industry and the government has to go through so many hoops and contortions that it is almost laughable. For example to open a bank account with a retail bank here takes days and possibly weeks to open an account in the US takes 24 hours. Why? Because the US does not subscribe to any of this nonsense but wants everyone else to subscribe.

So what does “Tax Heaven USA” tell us. If Florida banks were not allowed to sell “secrecy” which The Bahamas is not, they would go bust very quickly as a very large proportion of their accounts are from Latin America and if the account holders did not have protection from their home governments in Brazil, Argentina, etc, they would move the funds elsewhere.

Also at least two US States, South Dakota and Nevada, allow trusts to be set up and if one power associated with the trust is held by a non-US person it becomes a foreign trust for tax purposes and therefore non-taxable and if the trustee is US, it is considered to be a domestic trust and therefore there are no foreign reporting requirements to any other government or entity. South Dakota admits it has $175 billion held under this type of arrangement. So why would anyone need to use The Bahamas or any other tax heaven when they can use the US which is of course considered as a no sovereign risk jurisdiction. Further to that, of course, if you set up a company in various states, Delaware being the most “famous”, you can have a company with bearer shares so the beneficial ownership is hidden from any authority. The Bahamas was forbidden from selling companies with bearer shares in the 1990s by the US.

The Bahamas is a small country and with the constant interference of the US and EU it has decimated the financial services industry here and by the way the EU is as good as the US in protecting its financial industry. There is an issue of jobs as well as taxes and while they increase the number of jobs, we lose. The Bahamas may not have the clout to stand up to these giants but this hypocrisy should be constantly pointed out to the world that our friends are not really our friends...

Maybe there is a David and Goliath story here and The Bahamas should be part of it.

PATRICK H THOMSON

Nassau

November 16, 2018