BFSB Issues 'Level Playing Field' Challenge To OECD

by Amanda Banks, Tax-News.com, London

28 February 2002

The Bahamas Financial Services Board has issued a statement prior to the OECD deadline for commitment on harmful tax competition and transparency, warning that the jurisdiction will only cooperate with international initiatives on taxation if there is a 'level playing field', in which OECD members and blacklisted countries alike are forced to make changes.

'While the OECD is now accepting a reference to a level playing field in commitments, clarity is still required with respect to whom it applies and when it is applied,' explained Wendy Warren, CEO and Executive Director of the BFSB. She added that the Bahamas would likely be unwilling to act unless its 'principal competitors', which include blacklisted offshore centres, OECD member countries, and non-OECD members such as Hong Kong and Singapore, are also obliged to change their taxation regimes on the provision of cross-border and international financial services.

Ms Warren also commented that it would be unreasonable for the OECD to demand changes from the smaller offshore jurisdictions before its own members have amended their regimes, and expressed concern that the 12 month implementation plan outlined for countries which have made commitments to the OECD on tax and transparency would appear to be doing just this, ending, as it does, prior to the requirement that member countries come into line.

The BFSB Executive Director concluded that: 'The Board is therefore of the view that any commitment should only be given to the OECD with the most robust "level playing field" language. This language would be essential to ensure that The Bahamas changes its business environment only when every OECD member country, as well as all non-sanctioned Offshore Financial Centres (OFCs) agree to implement the same initiatives.'

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