Minister of International Business Donville Inniss has announced a plan for the country to earn $1 billion from international business within the next two to three years.
However, in order to achieve this goal, Inniss signalled his intention to aggressively chase more high net worth businesses, even as Barbados continues to come under scrutiny from international agencies.
While the international business entities here are said to contribute an estimated $500 million a year in rent, salaries, professional services, and accommodation, the sector has contributed less than $300 million directly to
Government’s coffers up to last year.
“Our work therefore in going forward is not just to sit and quarrel and complain about what others are proposing but to look at the opportunities . . . The march is to get businesses of substance,” Inniss told a high level stakeholders meeting last week with the Organization for Economic Cooperation and Development (OECD), a grouping of mainly rich countries.
“Barbados offers, perhaps above other jurisdictions, an opportunity to attract and retain business of substances. I am therefore satisfied that once we are all moving in the same direction the international business and financial services sector will be contributing well in excess of $1 billion per year to the Barbados economy within the next two to three years,” he declared.
The minister said Barbados would continue to come under pressure from international partners, but it was better placed than other domiciles which did not possess the same structures and resources.
“We would be foolhardy to believe that we are not constantly under scrutiny and our approach as a Government has been to get up and get involved in what matters most to this sector. So gone are the days when we sit in Barbados and complain about what others are imposing on us.
“Our approach, and thanks to the guidance of our partners, has been to get up and get involved in the meetings and organizations where major decisions are being taken that will impact on this sector,” he added.
Over the years the international business sector here has come in for major criticisms, with some organizations labelling Barbados a tax haven, a charge Inniss has stoutly denied, insisting instead that the country was a low tax jurisdiction.
The OECD has raised concerns about base erosion and profit shifting (BEPS), which it defines as tax avoidance strategies that exploit gaps and mismatches in tax rules to artificially shift profits to low or no-tax locations.
Inniss said Barbados had “agreed in principle” that there was a need to examine some policy areas that the grouping had considered harmful, but a final decision had not been made “in terms of the actual details”.
He said like Barbados, developed countries were seeking to retain their high net worth business and a compromise was needed to ensure “the right kind of playing field that is as level as possible”.
During last Friday’s deliberations in Bridgetown, issues relating to BEPS and other tax practices were discussed with a view to identifying areas of policies and legislation for enhancement and where new policies or technical assistance were needed.
Director of the OECD Centre for Tax Policy and Administration Pascale Saint-Amans described Barbados as “the most important jurisdiction in the area of financial centres” in the region.
However, he warned that whether local officials liked it or not, constant changes were taking place in capital flow, goods and services, especially since the 2008 financial crisis, and it was therefore necessary to keep up.
“We may like it or not but I think it is important to understand the environment that we thrive in. If you want to turn challenges into opportunities you need to be ahead of the others and engage and that is what this Government [Barbados] has done,” he said.