“Greater determination” to eliminate Bahamas from financial services

Former Prime Minister Perry Christie.

• Ex-PM says “answers seem obvious” on tax reform

By NEIL HARTNELL

Editor-in-chief of the Tribune

[email protected]

A former prime minister yesterday warned that COVID-19 had “only strengthened the resolve” of major nations to eliminate the competitive threat posed by the Bahamas and other Caribbean countries.

Perry Christie, making a rare public appearance while delivering the opening address at the Caribbean Institute of Chartered Accountants (ICAC) conference, warned that he was “not an option” for this country and of others to lose financial services industries that have been critical to the development of the middle classes of their societies.

The former PLP leader, who resigned from the party leadership following the landslide FNM victory in the 2017 election, also suggested there were “obvious answers” indicating the urgent need for reform in the Bahamas and the Caribbean, given concerns about fairness and whether existing systems generate sufficient funds to finance essential public services.

Recognizing that COVID-19’s devastating blow to the world’s public finances will only make members of the G-7 and the European Union (EU) more eager to drive international financial centers (IFCs) to bankruptcy, Due to the perceived loss of tax revenue, Mr Christie argued that their initiatives over the past two decades have been more focused on eradicating competition.

He added that these powerful blocs of nations and their forums “use the perception of the Caribbean region used for piracy to suggest that the Caribbean is more likely to be used for money laundering and terrorist financing.

“The real goal is to eliminate any competitive advantage that IFSs have due to tax systems that are not identical to those in OECD countries,” said Mr Christie, winking at the G-7 agreement on a minimum global corporate tax rate of 15%.

“The global pandemic has only strengthened the resolve of these countries to eliminate CFIs. Protectionism has become the order of the day whether they admit it or not. He also agreed that it was particularly troubling that the Biden administration is now ensuring that the United States provides “support” for initiatives already launched by the EU and the Organization for Economic Co-operation and Development (OECD ).

The former prime minister suggested that the Bahamas and other IFCs had made the mistake of “fending for themselves” and seeking to “negotiate with the big guys” alone, rather than as a whole, as this had resulted in both themselves and their environment. the classes being cropped by “1000 cuts”.

Calling on the Caribbean to ‘sing from the same hymn sheet’ and use wealthy residents living in many of its member states to lobby on behalf of regional IFCs, Mr Christie said, ‘Losing the classroom facilitator average [financial services] is not an option.

Some observers may wonder why Mr Christie apparently never implemented any aspect of this strategy when he had the opportunity while he was Prime Minister. However, he agreed yesterday that the Bahamas and others in the region must explore reforming their existing regressive tax systems for their own benefit and that of low-income members of society.

“We all need to ask ourselves whether our tax systems provide sufficient revenue to fund public funds,” he said at the ICAC conference. “Based on the debt-to-GDP ratios and figures, the answer seems obvious. Based on equity and the ability to pay; based on the widening gap between “have” and “have not”, the answer seems to be obvious. “

Arguing that the economic future of the Caribbean remains tied to tourism as the main engine of growth and jobs, Mr Christie called for a data-driven approach that would allow the Bahamas and others to know “the codes postal services ”where most of their tourists come from. so they can better direct limited marketing resources to where they will have the most impact.

“At our own risk, we do not pay attention that every resident understands and can help ensure the best possible experience for our visitors,” he said, adding that a data-driven approach could also help “personalize” the customer experience for tourists according to their personal preferences and tastes.

“The annual occupancy rate of hotels is around 60 to 70%,” said the former Prime Minister. “If we manage to use the new analysis tools as we wish and move the occupancy rate to 90%, we will increase the contribution to GDP by 50% without building a single roof. “

Mr Christie also revealed he was motivated to launch the Bahamas National Development Plan (NDP) after finding out Jamaica topped that nation in the World Bank’s ranking on ‘ease of doing business’ .

“It was a shocking realization for me, and I no longer needed to convince of a national development plan,” he added, suggesting that this could serve as a “model for the region” for his response to the COVID-19 pandemic.

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