By Scieska Adderley
Nassau Guardian Business Reporter
NASSAU, Bahamas -- Three months after Colombia placed The Bahamas on a blacklist, Financial Services Minister Ryan Pinder confirmed that The Bahamas will now pursue a tax information exchange agreement (TIEA) with the Latin American country and seek ways to avert future blacklistings by countries in the region before they happen.
Financial Services Minister Ryan Pinder
After conducting an “informal poll” among industry stakeholders, Pinder told Guardian Business that the general consensus was to pursue a TIEA.
“So we have Cabinet approval to pursue those negotiations and discussions with Colombia. Likewise, we are going to pursue that with Latin American countries as a whole in a multilateral setting to see if we can work cooperatively to address those situations,” he said.
A TIEA creates an official system for the sharing of tax information between two countries.
Back in October, the Colombian government placed The Bahamas on a list of global tax havens along with 43 other jurisdictions, applying a penalty tax rate of 33 percent on all assets moved into these countries as it seeks to cut back on what its tax authority has estimated is at least $10.6 billion in lost tax revenue annually.
Pinder said there “appears to be a trend” in Latin America, where major economies have started to blacklist international financial centres that do not have a TIEA with them or is “not cooperative” in tax matters.
“When it comes to Latin America, it’s very sensitive because it goes beyond just tax to the clients, it’s a matter of confidentiality, it’s a matter of public safety, it’s a matter of government information being leaked outside of governments that is used to the personal detriment of families and people. So it’s a very serious issue in Latin America and one that we are looking at very carefully,” the financial minister pointed out.
“Colombia issued a blacklist at the end of October and instead of rushing to negotiate, it was very important for us to understand from the industry what was important to them and their clients.”
Pinder’s latest announcement comes as The Bahamas has identified Latin America as a major new market for its financial services sector, in light of clamp downs on the shifting of citizens’ assets abroad by countries such as the UK, the US, France and others.
“On a greater scale, we also mentioned and discussed with the prime minister and the Cabinet the other day for approval to look at the whole strategy on Latin America, and try to engage multilateral settings such as CELAC (Community of Latin American and Caribbean States) or other multilateral institutions that we share with Latin America, maybe the OAS (Organization of American States), to see if we can find a solution or work together to really reverse this trend of blacklisting by Latin America, given the sensitivities of the clientele, to find a solution that is acceptable to clients, institutions and governments,” he added.
To date, The Bahamas has signed over 28 TIEAs since the Organization for Economic Co-operation and Development (OECD) announced in 2009 that would it add the country to a “grey-list” of nations deemed “non-cooperative” in matters of tax information exchange transparency until such time as the jurisdiction signed a minimum of 12 TIEAs.
Republished with permission of the Nassau Guardian