The Tribune

By DUDLEY TURNQUEST

SENATOR and Attorney General Ryan Pinder heralded the country’s twenty-five year journey from “tax haven” to international tax compliance at an industry forum this week.

Senator Pinder noted the country was blacklisted by the Financial Action Task Force (FATF) in 2000 during his speech at the Bahamas Financial Board’s (BFSB) Industry Development Series on Wednesday.

He said: “Over the last 25 years our tax compliance journey has helped shape our industry, to provide the focus necessary to be competitive, and to ensure we have the scope of offerings to be a jurisdiction of choice.

“Tax compliance has acted as a pillar of our national development, especially in the financial services industry.”

He noted the Financial Action Task Force (FATF) accused the country of being used as a destination to avoid a client’s home country’s taxes, and as a result, the country was placed on their blacklist to the detriment of national development.

“Penalties and new costs from blacklisting divert funds away  from essential areas, totaling $35,000,000 in 2000 when The  Bahamas was first blacklisted ($61,931,300.81 in 2023  factoring in inflation of the USD), affecting crucial  development initiatives,” Mr Pinder said.

He continued: “This assault on our national development continued. Over the  last fifteen years The Bahamas has been in a ‘Fight for our  Lives” mode. We have endured at least three black or Grey  Listings aimed at our financial services sector - The EU non cooperative countries on Tax Matters, The Financial Action  Task Force (FATF) Grey Listing and the EU Anti-money  laundering (AML) Blacklisting.

“These initiatives compounded  the adverse financial impact on our country, economy,  stagnating again our national development."

Mr Pinder said: “We as a jurisdiction reformed, passed many compendiums of  new laws, created new institutions such as the Financial  Intelligence Unit, the Compliance Commission, the Compliance section of the Office of the Attorney General and  the Competent Authority in the Ministry of Finance. The  Government of The Bahamas expended tens of millions of dollars to build the necessary regimes to be tax complaint.”

The attorney general said he believes that the new regulations cost the country business from some International institutions, but argued that "the composition of today’s financial services industry is much more relevant and ready to compete".

Senator Pinder also commented on the added complexities of becoming completely tax compliant with bodies such as the Organisation for Economic Co-operation and Development (OECD), which he accused of having double standards.

He said: “Unfortunately, things have gotten even more complicated given the current state of geopolitics and greater imbalance in  treatment when it comes to international tax compliance and  administration.

“The OECD has had a history of double  standards, evidenced by the global exercise of the Common Reporting Standard and automatic exchange of information on  a common accepted rules-based framework. That is all except for the United States which had its own regime, FATCA, which allowed the US to participate in regulatory arbitrage when it  came to transparency. 

He said: “This has not changed, immediately after coming to office, President Trump withdrew from the OECD Pillar 2 initiative to establish a global corporate income tax.

“An initiative that again was supposed to be a standard approach the world over, now  there will again be an uneven playing field – a playing field that  will be more difficult for small international financial centres like The Bahamas to play on, presenting a further risk to our  national development.

“In January 2026, the OECD agreed a "Side-by-Side" (SbS) package which allows the US tax system to co-exist with the 15 percent global minimum tax (Pillar  Two).

“It exempts US-parented multinationals (MNEs) from  key Pillar Two penalties—the Income Inclusion Rule (IIR) and  Undertaxed Profits Rule (UTPR).”

He added the United Nations would be better suited at creating international regulations that would “design and build  a truly equitable and inclusive international tax administration  architecture, with equal-footed representation.”