The global tax watch group that once branded The Bahamas as a harmful tax haven now welcomes the work by local officials to further the principles of transparency and effective exchange of information, according to an official of the Organization for Economic Cooperation and Development [OECD].
The Bahamas made a commitment in March 2002 to improve the transparency of its tax and regulatory systems and establish effective exchange of information for tax matters with OECD countries by December 31, 2005.
That vow lead to its inclusion in the Global Forum on Taxation designed for the very purpose of achieving transparency.
"Since that time, The Bahamas has played an active role in the work of the Global Forum and helped shape the way in which work towards a level playing field is carried out," explained Chris Barlow, of the OECD’s International Co-operation and Tax Competition Division Centre for Tax Policy and Administration.
Mr. Barlow pointed out in a communication to the Bahama Journal that currently the Global Forum is finalising a report that surveys the legal and administrative framework in the areas of transparency and exchange of information in tax matters in more than eighty countries.
"The publication of this report will mark a further step towards the achievement of a global level playing field in these areas," Mr. Barlow said.
A smaller group of Global Forum members, which includes the Bahamas, make up the Sub-Group on Level Playing Field Issues which develops proposals for the consideration of the Global Forum as a whole, he explained.
It is anticipated that the report will be published in May and according to OECD officials demonstrates how OECD and non OECD countries are working together to ensure that progress is made towards a level playing field.
The Bahamas was among 35 jurisdictions identified by the OECD in June 2000 as meeting the technical criteria for being a tax haven.
Addressing a prime OECD concern, The Bahamas has already abolished bearer shares for International Business Companies through legislation enacted in December 2000. All bearer shares previously issued were recalled the following year.
Authorities now require that the records of beneficial ownership of all shares of IBCs established in The Bahamas be maintained by a licensee under the Banks and Trust Companies Act. Relevant company records are also required to be maintained by the trustees.
The Minister of State in the Ministry of Finance James Smith had said that the Global Forum’s pending report would provide a wealth of information about the unevenness of the playing field which at present, he said, appears to be tipped heavily in favour of OECD members and non-member economies that were not named in any of the listing exercises.
He was giving a report on the Melbourne Global Forum, held in Melbourne, Australia last November.
More than 130 representatives of 55 governments, the Commonwealth Secretariat and the European Commission attended the meeting to review progress towards a level playing field based on high standards of transparency and effective exchange of information for tax purposes.
During the Melbourne meeting, the subgroup of which the Bahamas is a member, presented its report. Minister Smith said examining progress toward a level playing field was "an interesting exercise."
In the minister’s view, many practices for which offshore financial centres have been citied for deficiencies abound in OECD countries.
"Good examples of this are the proliferation of bearer shares and the failure to meet the same high standards for anti-money laundering as are generally found in place in [offshore financial centers]," he said.
- Austin DWI - New York DWI