The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

The Bahamas has some "tough decisions" to make within the next few months on the financial services industry's future, a former Bahamas Financial Services Board (BFSB) chairman is arguing.

Michael Paton, pictured, a Lennox Paton attorney and partner, told the Nassau Conference that "ring fencing" was among the key issues this nation must immediately address. "We are in a general state of uncertainty. I would say that in The Bahamas and the other jurisdictions we are in a high state of anxiety right now, and we're trying to figure out how to move forward," he said.

"The big issue is ring fencing. We have to address this. Under the new criteria you cannot have advantages offered to non-residents only in respect of transactions between other non-residents, and we can't have those advantages ring fenced from the domestic taxes.

"How do we eliminate preferences and ring fencing without causing irreparable catastrophic damage to the Bahamas as an IFC? As I and others see it, the two primary issues we are facing is Samp Tax and Business License."

Non-resident, or 'offshore', entities currently enjoy Stamp Tax exemptions, lower Business Licence fees and other tax breaks not granted to domestic companies. These now have to be "equalised" to meet the European Union's (EU) demands.

"We have to deal with Business License by the end of this year. We just can't put out a Bill that says all preferences be removed without addressing how the two main ones, Stamp Tax and Business License, are dealt with," said Mr Paton.

"We need to be that oasis of calm and order. Certainty, I think, requires us to have tax neutrality. If we change that I think we really destabilise the whole proposition of what The Bahamas is as an IFC. We have to better our PR message. We have some tough decisions to make over the next few months."