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and corruption in Russia and the laundering of criminal proceeds
through Switzerland, the British Virgin Islands, Dubai and Cyprus will
be analyzed at the upcoming OffshoreAlert Conference.
Moscow-based tax attorney Sergei Magnitsky blew the whistle on a $230
million tax fraud in which his client, UK-based investment advisory firm
Hermitage Capital Management, was one of the victims, he was taken into
custody by the officials he accused and held without bail in primitive
and deadly conditions until he died in his cell in 2009.
The OffshoreAlert Conference will look at evidence of corruption by the Russian...
BTC, Commonwealth Brewery and international banks operating Bahamian subsidiaries are among those companies who will be subject to a 3.5 percent increase in the cost of remitting profits out of the country as a result of a new tax on the repatriation of profits imposed by the government.
Minister of State for Finance Michael Halkitis yesterday clarified an amendment to the Stamp Act highlighted by Guardian Business on Friday, which had caused considerable concern among practitioners in the financial, legal and real estate sectors who feared their transactions would be impacted...
Two Bahamian owned and operated destination management companies (DMCs) and a number of Bahamian subcontractors staged the recent Baha?Mar groundbreaking ceremony and celebratory dinner, which cost in access of $250,000.
The celebratory dinner was held on the evening of February 21, and the groundbreaking event was held the following day. The project has been billed by developers as perhaps the largest of its kind currently in process anywhere in the world.
Sarkis Izmirlian, Baha Mar chairman and CEO, said to the media after the groundbreaking event on Monday that it is businesses like the two DMCs and the various Bahamian subcontractors hired for the events, that he hoped would benefit f ...
Bahamas WiMax, the wireless Internet Service Provider, has partnered with Nassau-based Lignum Technologies to donate a state-of-the-art computer laboratory to Every Child Counts in Marsh Harbour, Abaco.
Bahamas Wimax's chief executive, Matthew Carey, said: "Computer skills have become required learning
The idea of directly taxing foreign financial services companies plying their trade and earning profits from The Bahamas may be gaining some traction in the industry, with an expert calling for a serious investigation into the option.
Adrian Crosbie-Jones, managing director of the Private Trust Corporation Limited (PTC), raised the corporate tax matter before attendees of the Nassau Conference on Wednesday. Crosbie-Jones said that foreign financial institutions are already taxed on their Bahamian profits, at rates in the 25 to 35 percent range.
"The only problem is that tax is not paid here," Crosbie-Jones said. "The tax is paid somewhere else. So the Swiss get the benefit of the profits generated in The Bahamas that are ultimately repatriated back to Switzerland and as a result the Swiss taxpayer has a reduced tax to pay because of the endeavors of Bahamians.
"We've got to start looking at perhaps ways where The Bahamas can benefit and participate to some extent in part of that tax."
The net effect on taxes foreign corporations pay would have to be neutral, at least, Crosbie-Jones told Guardian Business yesterday. If implemented properly he said such institutions could find they actually improve their profitability, while the country benefits from increased tax revenue receipts.
Though it may seem counterintuitive that such businesses could potentially earn greater profits under such a corporate tax system, Crosbie-Jones explained that the way Bahamian business license fees are handled creates the opportunity. Although the business license is now a tax, it is calculated based on turnover and taken out before net profits are deduced.
For illustration, if a company made $100 in gross profit and had a $5 charge for business licence fees as its only expense, it would book $95 in net profit. Whenever those funds are ultimately repatriated and taxed, it may pay 30 percent or $28.50 to some other country. Earnings after taxes would come in at $66.50 in this scenario, The Bahamas taking home $5. If there was no business licence tax but The Bahamas took 10 percent of net income and the foreign company 20 percent, the company's earnings after taxes move up to $70, The Bahamas' take improves to $10, and the foreign state gets $20.
The example is oversimplified, but the underlying point stands - more government revenue and possibly greater profits for institutions through sharing the tax on net profit. The numbers are small for illustration purposes -- foreign financial institutions may together book hundreds of millions in profits any given year.
Other jurisdictions already have such practices in place, according to Crosbie-Jones, who referenced financial centers like Jersey and the Isle of Man as examples. He said they use a zero/ten percent structure where foreign companies in the financial services industry pay 10 percent and local companies pay 0 percent. If implemented locally, such a regime would also need to exclude international business companies (IBCs) operating out of The Bahamas. Taxing them could have a number of other negative implications for the industry, not least of them being a loss of competitive position and potentially the loss of the IBC business to other players.
The jurisdiction may even benefit from others recognizing that the business licence is in fact a tax, according to Crosbie-Jones.
"You have a form of corporate tax--you have business license," he said. "If you were to call it corporate tax, which is in reality what it is, perhaps the whole world would perceive you in a different way."
The introduction of a corporate tax regime deserves serious investigation, according to Crosbie-Jones. It would require thorough research, and ultimately the implementation of a network of double-taxation treaties to ensure that companies would not end up paying more than they would under the current regime.
The PTC managing director also said the jurisdiction may actually be more vulnerable by not having such a tax in place. With global regulatory trends eroding privacy as a reason to use this jurisdiction for business, factors like reduced after-tax profits could cause companies to move to jurisdictions where their net take-home was higher. It is a tide that The Bahamas may not be able to stand against, he cautioned, potentially threatening the entire industry. Crosbie-Jones urged stress testing of how that and other developments could impact the industry as a whole.
Without a complete study presented to the government illustrating the benefits and measures for a successful implementation, Crosbie-Jones doubted that such talk would amount to anything more than talk. He suggested that the intellectual and research resources of an institution like The College of The Bahamas could be harnessed to do the necessary ground work.
For all the challenges involved, however, the PTC managing director is convinced that what the government is earning from the industry is 'really nothing compared to what it could be making'.
"Another $100 million to government coffers could be quite dramatic," he said.
FOUR Bahamian businesses - a restaurant and three luxury retailers recently came up winners in the MasterCard-Ministry of Tourism 'Find Your Way' initiative, walking away with an early Christmas present of cash from the international credit and debit card company for being number one in the increase of MasterCard sales volume for the month.
The most recent winners were the Kafe Kalik restaurant at Lynden Pindling International Airport, Carlo Milano and Effy Jewellers of Bay Street, and A la Plage, Marina Village, Paradise Island. Each received international recognition and a cheque for $1,000, rewarding them for their performance.
"The outstanding performance of our winning merchant ...
THE New Providence Road Improvement Project has proved to be "the kiss of death" for many small Bahamian-owned businesses in the Robinson Road and Market Street areas, a leading consultant to the sector telling Tribune Business "at least 25" had gone out of business.
By ALISON LOWE
Businessmen yesterday expressed some optimism that economic conditions and the business environment in the Bahamas will improve in 2011, but recovery tempered by a variety of factors - rising oil prices, government intervention, Bahamian consumer debt levels and the effectiveness of recent economic stimuli in the US.
President of the Bahamas Chamber of Commerce, Khaalis Rolle, said he was "cautiously optimistic" for Bahamian economic prospects next year if conditions improve in the US, but with several caveats.
"I am beginning to see some levelling off, but 2011 is going to be all about recovery. To the extent that the Governme ...
By ALISON LOWE
A new Customs Management Act will allow Bahamian companies found guilty of smuggling and tax evasion to be publicly "named and shamed", and charged increased fines, the Comptroller of Customs warned yesterday.
Meanwhile, a "code of conduct" specifically tailored to Customs officers will be introduced in the Act, along with a commission to hear complaints, in an effort to more effectively enforce discipline within the revenue collection agency.
The revised Customs Management Act is expected to go before Parliament in 2011. It is presently in draft form, under review by the Government.
In an interview with Tribune B ...