By NATARIO McKENZIE
Tribune Business Reporter
THE Bahamas must gather all stakeholders to "brainstorm and strategise" on a response to the European Union's (EU) 'blacklisting' threat and "ever-changing rules of the game".
Gowon Bowe, the Bahamas Institute of Chartered Accountants (BICA) president, told Tribune Business that the EU's decision is "certainly not good news" and requires immediate work by the public and private sectors to develop a response.
"The Government must gather a comprehensive understanding of the rationale for the blacklisting, as it is obvious that the impression garnered by our governments in the previous round of blacklisting was misinformed," said Mr Bowe.
"Further, there needs to be immediate action to gather all stakeholders to brainstorm and strategise on the plan that must be presented to the EU but, most importantly, be actioned in a rapid fashion to demonstrate compliance with the rules of the game, albeit ever changing rules."
He added: "Given the various tax initiatives on the table, including WTO accession, Business License, tax compliance etc etc, there needs to be a comprehensive strategy regarding tax planning for the country of The Bahamas, with milestones and timelines that are acceptable to those in the OECD and EU.
"While we are unfairly judged, we can either cower under the pressure or punch above our weight, but that requires substantive action that is measurable and can be used as upper cuts to the EU in demonstrating we are an international financial centre, superior in service and regulations."
The 'blacklisting' decision by the EU comes roughly three months after it placed the Bahamas and seven other jurisdictions that were impacted by hurricanes last summer on a 'watchlist'. The EU said these jurisdictions, which were given special consideration, had been given until early 2018 to respond to the EU's concerns.
"When the Bahamas was initially not listed, persons conveniently omitted the reason for not blacklisting the Bahamas, and this was due to the EU deferring its decision as a result of the devastation perceived to have been caused by the hurricane season," Mr Bowe said.
"This is now coming to the forefront, as it appears that the EU has taken a decision that the impact of the hurricane season was minimal and that the current state of tax compliance in the Bahamas is not at an acceptable position. Therefore, Government and other stakeholders must be meticulous in understanding the rationale for the deferral, and most importantly, appreciate that temporary deferral was not an endorsement of the plans we have presented.
"The decks are always stacked against smaller international financial centres, as those carrying the bigger sticks do serve as bullies. The Bahamas has taken steps to align with the OECD and EU tax initiatives, as while we are not taking an accelerated path, we should be recognised for moving at a pace that had previously been deemed acceptable. The changing goal posts is an unfair phenomena that, unfortunately, we as a country will have to grapple with in the global tax arena.:
Mr Bowe added that while immediate action was necessary, the Bahamas must not rush in blindly. "We must remember the adage, less haste more speed - actions and decisions need to be expedited but not rushed blindly," he said.
"We need not seek immediate reversal if the blacklisting is real, but rather strategic reversal with all hands on deck making decisions that are both tactical, short term and strategic, long-term."