• Provider says 'too big' for Recovery Committee
• Urges corporate tax as he challenges: 'Be bold'
• Says firm's revenues down 75% due to COVID
By NEIL HARTNELL
Tribune Business Editor
A Bahamian financial services provider yesterday voiced doubts the Government-appointed Economic Recovery Committee (ERC) will propose the "swashbuckling" reforms needed to revive the sector.
Paul Moss, principal of Dominion Management Services, told Tribune Business that the need for a low-rate corporate income tax and other bold moves to place the financial services sector back at the industry's forefront would likely be "too big" for both the Government and committee members.
Calling for the Committee to back his call for a shift from a 'no tax' to 'low tax' platform, in a bid to end the scrutiny by the European Union (EU) and others, Mr Moss said he held out little hope this would actually occur.
"I doubt they would do it," he told this newspaper. "I think it's going to be big for them to think about. I don't think it's going to happen. Unless something like that happens we are going to see the further shrinkage of the industry until it cannot shrink any more.
"We really have to shore up that industry and do something swashbuckling to show the world we're serious about being in this industry, that we're serious about taxation and we're bring forthright in our tax outlook for the world to see that The Bahamas is on the right stage with doing business in a transparent way.
"Until that happens we will continue to be blacklisted and people will shy away from the jurisdiction. Until we open our economy to the citizens of the world and show we have these double tax agreements, and operate in a tax transparent manner, we won't be attractive to investors, have people come to our country and get the growth we should."
Mr Moss has long called for The Bahamas to introduce a low-rate corporate income tax of 7 percent or less as a means to reposition its financial services industry as a tax transparent sector, on the basis this would give it extra legitimacy and help attract companies to domicile and do business here.
The Economic Recovery Committee has numerous members connected to the financial services industry, including John Rolle, the Central Bank's governor; Christina Rolle, the Securities Commission's executive director; and Tanya MacCartney, the Bahamas Financial Services Board's (BFSB) chief executive.
Ms McCartney indicated in a recent newsletter to the financial services industry that the proposed reforms being examined by the Committee include areas such as the ease of doing business and Immigration, but Mr Moss argued they needed to go much further than that.
"I don't think they have the spirit of what this moment calls for," he argued. "It's calling for boldness, things not done before. I'm not sure they have the make-up to do that. They're taking the approach that's been taken for too long now."
COVID-19 has struck a Bahamian financial industry that was slowly being whittled away by a 20-year process of attrition sparked by international regulatory and tax initiatives. Given that private banking and wealth management fees are typically related to assets under management, which will likely have shrunk in recent weeks, most - if not all - Bahamian providers will now be facing reduced earnings.
Mr Moss revealed that his firm's revenues are down 75 percent compared to pre-COVID-19 levels, as he said: "We're just hoping to get through this year and see what happens. To be quite frank with you it's very slow. There's not a great deal of activity out there.
"We're just praying that things turn around and get better very quickly. A lot of clients are not really sure what the future holds, so they are really reluctant and conservative in their approach."