The Tribune

The government has penalised both low income Bahamians and the financial industry’s competitiveness by failing to enact comprehensive tax reform, an opposition party argued yesterday.

Arinthia Komolafe, the Democratic National Alliance’s (DNA) leader, said in a statement that The Bahamas’ ninth-place ranking on a list of jurisdictions deemed to have “corrosive corporate tax policies” had reinforced the urgent need for this nation to “shed the tax haven label”.

Responding to the Corporate Tax Haven Index released by by the Tax Justice Network (TJN), she argued that there was “a direct correlation” between The Bahamas’ struggles to redefine its “value proposition” as an international financial centre (IFC) and the regressive taxation structure that penalises middle and lower class Bahamians.

Mrs Komolafe, noting that the Tax Justice Network’s listing occurred despite the legislative package passed by The Bahamas last year to address precisely the same corporate tax evasion concerns, said: “We have expended much time and resources on being removed from lists produced by international agencies while increasing the cost of doing business and concurrently reducing our competitiveness.”

Calling for “a more holistic approach” that “redefines the value proposition of The Bahamas as an IFC”, she added: “It is regrettable that our recommendations have fallen on deaf ears by an administration that lacks or has failed to articulate a long-term vision for our country.

“We call on the government once again to wake up from its self-induced slumber and substitute its rose-tinted glasses of naivety with clear lenses of the new global reality. The goalposts will continue to be moved and the prospect of a real level playing field is wishful thinking. The Bahamas must chart a new course which sheds the tax haven label and reposition itself as an IFC without the baggage associated with perceived inadequate tax practices.”

Mrs Komolafe accused both the Free National Movement (FNM) and Progressive Liberal Party (PLP) of “perpetuating a regressive and oppressive tax system on the backs of the working and middle class, while taxing businesses on turnover rather than revenue”.

“The DNA submits that comprehensive tax reform which prioritises the creation of a progressive and more equitable system of taxation is long overdue,” she added. “There is a direct correlation between the challenges we face as an IFC and the regressive tax system that both political parties have maintained for the benefit of special interest groups.

“The Bahamas is being held back by the complacency and lack of fortitude by a government that governs for a select few. We remind the government that momentum is gathering around global corporate tax reform and they are only delaying the inevitable... The proverbial clock is ticking and the future of our financial services industry hangs in the balance.”