The Tribune

By RASHAD ROLLE

Tribune News Editor

rrolle@tribunemedia.net

PRIME Minister Philip “Brave” Davis said the corporate income tax his administration will introduce would not directly affect Bahamian-owned ventures, but would generate $140m per year in government revenue.

The Davis administration will introduce a Qualified Domestic Minimum Top-Up Tax, which targets multinational enterprises with annual turnovers exceeding 750 million Euros.

During his contribution to yesterday’s mid-year budget debate, Mr Davis rebuffed critics of the tax.

“As a part of the ongoing misinformation campaign,” he said, “there are those who began saying that droves of businesses will leave The Bahamas as a result of this tax.”

“The vast majority of countries in the world, including those like us who didn’t previously have corporate income taxes, will be introducing similar regimes or face the threat of blacklisting and other possible consequences,” he said. “Rather than wait around to be accused of non-compliance, we have taken proactive action to introduce this corporate income tax.

“Our prospects as an appealing jurisdiction for investments and the operation of multinational corporations are just as strong as they ever were. If these companies don’t pay their tax here, they would simply have to pay the same tax to their home jurisdiction. We have managed to retain many of our competitive advantages as all nations will be on the same playing field in relation to corporate income taxes.

 “So if they are operating here and we have the opportunity to get 15 per cent of their taxes, we need to collect it here. It only makes sense. It is only prudent for us to make sure they pay their fair share here and not in their home jurisdiction.”

 Mr Davis said the tax lets the country live up to its OECD commitments.

 He compared pursuing revenue from large multinational companies to targetting people who owe real property taxes, many of whom, he said, are “owners of high-value properties”.

 Acting director of the Department of Inland Revenue, Shunda Strachan, recently reiterated that her department will execute its power of sale against scores of delinquent real property tax accounts, saying the era of payment plans and amnesty periods is over. She said real property tax arrears stand at about $900m.

 Mr Davis said yesterday: “Do we not feel that people who buy these nice vacation homes in some of the most beautiful areas that our nation has to offer should be paying their fair share? Why should they get to skip out on their tax obligations when the average middle-class family is living up to their responsibilities? The system of non-enforcement as it existed, was patently unfair.”