By NATARIO McKENZIE
Tribune Business Reporter
The government has approved the creation of tax residency certificates for permanent residents so they can prove compliance with other countries’ laws, a Cabinet Minister said yesterday.
Brent Symonette, minister of financial services, trade and industry and Immigration, told the Society of Trust and Estate Practitioners (STEP) Caribbean Conference that the government has approved the development of tax residency certificates that will each have their own Taxpayer Identification Number (TIN).
Besides confirming that The Bahamas is the holder’s main domicile, these certificates will help certify their compliance with home country tax laws and address Organisation for Economic Co-Operation and Development (OECD) claims that this nation’s permanent residency product is in danger of being abused by tax evaders.
Mr Symonette, elaborating on the issue following his STEP presentation, said: “When the DPM (deputy prime minister), attorney general and myself were in Paris months ago, the OECD stated that they had an issue with persons using permanent residency as a way of avoiding tax requirements in their own country.
“What is up at the Attorney General’s Office at the moment, and has been approved in principle, is that we will have a permanent residency certificate. This means you would have to spend a minimum of 90 days in this country - not consecutively - but over the year, and no more than 183 days in one other country.
“Let’s say you were born in France; you would get a tax information number on your permanent residency [certificate], and you would use that in any country in the world and say: ‘Look, this is my tax information number in The Bahamas. I am a permanent resident in The Bahamas and that would offset any taxes that are required in that country or any other country in the world.”
Mr Symonette had alluded to the introduction of a tax residency certificate more than a year ago, which is a product the former Christie administration had also considered introducing in response to requests from the financial services industry and its clients.
The minister, meanwhile, also spoke to the recently-released Oxford Economics report that was commissioned by the Bahamas Chamber of Commerce and Employers Confederation (BCCEC) to assess the likely impact of full World Trade Organisation (WTO) membership on this nation’s economy.
“The Oxford report is saying we cannot continue to keep the business model as it is,” said Mr Symonette, noting that Ryan Pinder, a former Cabinet minister under the Christie administration, had delivered much the same message during his presentation at the STEP conference.
“If we are going to continue to follow what the PLP is suggesting, and keep a very restricted environment on business, the country will not continue to grow,” he said.
Mr Symonette added that the Minnis administration has already overseen exchange control relaxation. “It’s easier for Bahamians to get money to continue to do business in the US. We are making it easier to do business generally, and this is a way we can help to grow the economy so that more Bahamians will not only get ownership but have well paying jobs,” he said.
Ramesh Chaitoo, who co-authored the Oxford Economics report, told Tribune Business last week that this nation faces significant internal pressures to maintain its economic status quo.
Yet he argued that there was abundant evidence to show The Bahamas is not generating sufficient GDP growth and new jobs through a narrow economic model that has largely remained unchanged for 60 years.