By NEIL HARTNELL
Tribune Business Editor
The Bahamas “must not take the victim approach” over its French blacklisting, a risk management specialist is warning, but instead set a ten-year “vision” for how financial services and tax will evolve.
Emmanuel Komolafe told Tribune Business this nation “cannot keep playing defense” with its financial services industry, as it had done for the past two decades, and view remaining off national and multi-country blacklists as its main objective.
Calling for a strategic approach, he urged The Bahamas to envision what it wants its financial sector to look like a decade from now, and then lay out a road map for reaching that objective. Acknowledging that this nation needs to “evolve” with global trends, he argued that changes to its taxation system were among the reforms that need to be considered if it is to remain competitive.
“For the most part we’ve been on the defensive,” Mr Komolafe said of the country’s response to international tax and regulatory initiatives. “We need to sit down and look at the future, and see what we want to be to stop this attrition and continuous attacks on the financial services industry.
“We cannot keep playing defense. At some point we have to take a step back and chart the way forward, being strategic in what we want to achieve rather than trying to simply avoid these lists. What we do must feed into what we want the industry to look like ten years from now.
“Do we need to reposition? Do we need to reform? Do we want to change the tax system?” he asked. “Hopefully we will not have another situation like this [France blacklisting] again, but there are no guarantees it will not happen.
“We have to decide the plan, and effectively communicate that plan. The landscape of financial services has changed, and continues to evolve, and we need to evolve with it. It’s also an opportunity whenever we experience things like this to regroup and focus on the future rather than only reacting.
“We should not take a victim approach to this, and instead take the position that we’ll reposition out industry, repurpose and regroup. Unfortunately it won’t be the same, but there will be opportunities as an industry. We cannot put our hands up and throw in the towel.”
France recently placed The Bahamas on its national “blacklist” on the basis that this country had been too slow in responding its its requests for legal co-operation and assistance on tax information exchange matters, and also expressed dissatisfaction with the content.
Mr Komolafe argued that the French move should force The Bahamas to reassess its international and diplomatic relationships, especially since the Government’s rationale for opening the embassy in Brussels at the European Union (EU) headquarters was to ensure this nation remained one step ahead of international regulatory initiatives impacting the financial services industry.
“We’ve passed various laws, changed the model to stay off the blacklists, but none of this has helped us to shed the tax haven label,” he told Tribune Business. “We’ve increased the cost of compliance, increased the cost of doing business, created attrition in the financial services industry.
“Our efforts have to count for something. We’ve overhauled the financial services legislation and put in all these additional regulations. We must get something for it.... In spite of what we believe is quite a robust regulatory framework, and we’ve been very co-operative as a financial services jurisdiction, people in the industry wonder what more is required of us to see The Bahamas continuing to end up on these lists.”