The international business and financial services sector is in for a major overhaul, Minister of International Business Donville Inniss has revealed.
With the intention of making the sector a greater contributor to the island’s economy and in keeping with international best practices, Inniss said it was necessary that a restructuring of sorts takes place, to include a review of the current tax rates, as well as legislation.
Addressing a recent international business update seminar organized by the Institute of Chartered Accountants of Barbados at the Hilton Barbados Resort, Inniss said his ministry had already begun a full review of the sector and had concluded that changes had to be made.
“I can report to you that we have accepted that we will have to make important changes to the various pieces of legislation that governs our international business and financial services sector in Barbados. We have to be far more proactive and realize that there are some inherent dangers in our present suite of legislation, which must be amended,” the minister said.
“Our desire is to have a product mix that fits into global standards, ensures greater substance in our jurisdiction and better positions Barbados to be a more significant domicile for international business. So issues such as international business entities, however defined, engaging in business in Barbados, will also have to be clarified. I think there has been a bit too much ambiguity along the way and therefore we intend to bring greater clarity to that aspect of it as well,” he said.
Inniss added that changes may have to be made to the tax rates as the authorities establish the foundation for the new regime for the international business and financial services sector.
He said it was critical that Barbados “exploit the foreign exchange earning potential” of the sector while adopting international best practices for risk and compliance.
“We are therefore now poised to restructure, reengage and redirect Barbados’ international business and financial services sector to make it an even greater contributor to our economy. Part of that restructuring must include methodologies that allow us to better measure the contribution of the international business and financial service sector to the economy,” said Inniss.
In that regard, Inniss said he recently put together a team consisting primarily of public officers and officials from the Barbados International Business Association (BIBA) to “device mechanisms that will allow us to better define the international business and financial services sector, capture the data on them and be able to report it in a timely fashion and therefore be in a better position to make informed decisions about the sector”.
Pointing out that a number of administrative and compliance matters were to be completed by the end of the current financial year, Inniss said he had asked the Ministry of Finance to grant a waiver of penalties for the sector in relation to tax filing at the Corporate Affairs and Intellectual Property Office.
“While the state needs the revenue, my perspective is that more revenue will come when we have a less burdensome administrative arrangement that caters to private enterprises in Barbados,” said Inniss.
He pointed out that the sector was also being impacted by a number of international sanctions and tax laws including those coming from the Organization for Economic Corporation and Development (OECD).
However, Inniss said, while Barbados “undoubtedly come under the microscope” and had to constantly and consistently explain and defend its rights and policies to external bodies, it would not roll over and play dead.
“Barbados has not thrown its hands in the air and cower in defeat, nor will we ever do such. Instead, and in keeping with our practices and conventions we have sought to be a partner in this shift on international tax policies. We can quarrel and curse about being picked on by the big boys or we can cry foul and say that there . . . [is a] lot of hypocrisy because there are a lot of member states in the OECD that have regimes that are deliberately more harmful than any that we can have in the Caribbean.
“But the approach that my ministry has been made to undertake is a detailed self assessment of our current suite of products and to admit to where we have efficiencies and to identify strategies to [fix] such,” Inniss explained
He gave the assurance that a team from the Financial Services Commission, the Barbados Revenue Authority, the Central Bank, BIBA, and International Transport among others, had been working to “unravel” issues affecting the sector.
Article taken from the Barbados Today of August 29th, 2017