New Bahamian Government Takes Internationalist Position

by Mike Godfrey, Tax-News.com, New York

28 June 2002

The newly-elected Bahamian government has quickly swung into action with its first budget, which passed the House of Assembly last week and is now being debated in the Senate.

Minister of State for Finance and former Governor of the Central Bank, Senator Smith told the Senate on Monday that the $1.035 billion dollar budget is expected to be mostly funded from the existing tax base that relies heavily on import and export duties. These duties, said the former Ambassador of Trade and Investment, are expected to contribute about $460 million or 47% of recurrent expenditure.

Smith said that while no new taxes are contemplated in the Budget, a comprehensive review of the tax regime is expected to be carried out in the coming months. "Perhaps, then we can return to Parliament with some new and/or modified revenue measures which take account of issues such as over concentration, equity, ease of collection and also with an eye on the international trade arrangements, such as the WTO and the FTAA which the Bahamas is currently engaging," he said.

The minister said that the government has already begun to assess all of the elements and projects outlined in 'Our Plan', the PLP election document. He said that such projects are aimed at attracting investment, both domestic and foreign, expanding the economy, generating employment opportunities and are intended to raise the living standards of all residents.

"We sincerely trust that with God's help and the support of all Bahamians, we are able to achieve our main objective of constructing a strong, modern and dynamic community for all," said Smith.

Announcing the budget, new Prime Minister Perry Christie said the creation of a new Ministry of Financial Services and Investment is the clearest indication of the determination of his government to place the country’s financial services sector in the strongest possible position.

“This Ministry will consult closely with the industry and related professions to develop policies and measures that will place the financial services sector at the forefront of international competition,” he said.

The Prime Minister said the government will ensure The Bahamas meets all of its international obligations, especially those which involve the participation of the country in the concerted international effort to combat the financing of crime and terrorism. He added however that “ we will ensure that every action which we take in response to international developments is not an avenue through which competing jurisdictions can impose burdens on The Bahamas which they themselves are not willing to accept or is not an avenue through which other countries can impose burdens on us with the aim of diminishing our competitiveness and enhancing their own”.

The government will also ensure full compliance with essential safeguards against money laundering but intends to review the Financial Transactions Reporting Act to determine if procedures can be simplified to streamline and eliminate any unnecessary bureaucracy.

Minister of Financial Services and Investments, Allyson Maynard Gibson told the House of Assembly that integrity, transparency, accountability, efficiency and professionalism will be the watchwords of the Ministry.

Recognising that it is imperative for The Bahamas to clearly define itself as a financial service provider and pursue policies in accordance with that definition, the Minister also reaffirmed earlier pledges that all interested parties should be at the table as the Government evaluates development and pursue policies to keep The Bahamas on the cutting edge.

Referencing the recent financial services European Tour on which she joined representatives of the Bahamas Financial Services Board, the Minister indicated that her primary objective in meeting with institutions heavily invested in The Bahamas was to ensure they recognise that Government sees the Bahamas being developed not as an Offshore Financial Centre but rather as a Financial Centre. The Bahamas competes with and offers the same services as other financial centres such as Switzerland, London, New York, Hong Kong and Singapore.

In the future, said the Minister, financial centres would be evaluated and chosen on the quality and productivity of their services providers; the clarity of the jurisdiction's policies; the standards of regulation applied in the jurisdiction; the speed with which various agencies respond to applications; the extent to which the jurisdiction responds speedily to market requirements; the extent to which the jurisdiction involves the private sector in policy formulation; and the general ambiance of the jurisdiction. The Bahamas recognised that the world of financial services is changing and is ready to respond to that change. "We are blue chip, well regulated and cooperative. We are not and will not be a centre where ill-gotten gains may be hidden," attested Minister Gibson.

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