The Bahamas “does not have the luxury of changing its tax system on a dime”, a Cabinet minister argued yesterday amid escalating pressures for a minimum global corporate tax rate.
Kwasi Thompson, minister of state for finance, told a post-budget press conference that The Bahamas cannot afford to “make changes at a whim” and “haphazardly” adjust its taxation system without having the necessary data to determine the impact on taxpayers, businesses and the wider economy’s competitiveness.
The Bahamas and other international financial centres (IFCs) are likely to come under increasing pressure to implement a corporate income tax if the US and European Union (EU) can reach agreement on the issue, but Mr Thompson argued that local debate on the matter was too “nonchalant” and not being guided by empirical evidence.
“Many people are speaking about changing the tax structure, and in an almost nonchalant way are saying change this, change that,” the minister argued. “I don’t believe the Ministry of Finance has the luxury of changing on a dime when it comes to tax structure….
“We want to be data-driven, not do this stuff haphazardly. We cannot make changes at a whim without having data. What we’re committed to doing, once the results come in, is to have a dialogue and discussion with the public on what they are.”
The Prime Minister, in unveiling the Budget on Wednesday, said the Ministry of Finance was engaged in “a diagnostic review” of tax policy and administration, as well as an expenditure assessment, as it moves “to have equity and fairness in taxes, and efficiency and impact in expenditures”.
On the diagnostic study, he disclosed: “This study will examine the Government’s current sources of taxation, revenue trends and will explore issues such as equity and efficiency in our tax practices.
“At the completion of this exercise, we intend to publish the findings in a white paper to garner feedback from key stakeholders and the general public on how the Government should proceed with our ongoing tax reform efforts.”
Article Credit: Tribune242