The Tribune

By RASHAD ROLLE

Tribune News Editor

rrolle@tribunemedia.net

ELECTED officials debated a bill to introduce a new corporate tax aimed at multi-national corporations with annual revenues exceeding $800 million.

Prime Minister Philip “Brave” Davis said the Domestic Minimum Top-Up Tax Bill 2024 is projected to generate up to $140 million in revenue, supporting the government’s policy agenda without burdening Bahamian-owned businesses or individuals.

The tax is part of a global initiative led by the Organisation for Economic Co-operation and Development (OECD) to establish a minimum 15 percent tax rate on multinational corporations operating across multiple jurisdictions.

In introducing the legislation, Mr Davis stressed that the tax would not affect local Bahamian businesses. “If you do not own a multinational entity making €750 million or more, this tax does not apply to you,” he said.

 Mr Davis argued that the new tax would ensure large multinationals pay a fair share of the revenues they generate in The Bahamas, adding that such a policy was aligned with both fairness and compliance with international standards.

 He said the bill forms part of the government’s recent push to increase tax compliance and close enforcement gaps that have seen some property owners evade tax obligations.

 Referencing recent measures in property tax collection, Mr Davis noted that approximately 70 percent of outstanding real property taxes are owed by second homeowners, most of whom are non-Bahamians.

 He cited the current administration’s record in collecting unpaid taxes and pointed to the contrast with previous governments, saying that in prior years, “many of these second homeowners” had not paid their tax obligations.

 The Domestic Minimum Top-Up Tax aligns with the OECD’s global standards for a 15 percent corporate tax on large multinational companies.

 Mr Davis highlighted The Bahamas’ active participation in shaping this policy, saying that the country’s representation on relevant international bodies, including a UN committee, underscores its commitment to fair tax standards.

 Mr Davis also emphasised that the government held a public consultation process from August to September to gather feedback from stakeholders and industry observers. He noted that responses were supportive, with the general sentiment that the new tax would not negatively impact The Bahamas’ financial services sector.

 The bill includes measures to simplify tax administration and facilitate compliance, including provisions that align reporting and payment requirements with OECD guidelines. The legislation also grants the Financial Secretary investigative powers, allowing tax authorities to require documents for assessing tax liability and enabling penalties for non-compliance.

 Mr Davis noted that some exemptions are under consideration, including for investment funds and insurance companies, due to the unique structure of their operations.

 He said the tax reforms align with broader government efforts to improve economic conditions and fiscal responsibility in The Bahamas.

 Members of the opposition supported the bill.