As Barbados continues to fight to keep up with constantly changing international tax and money laundering policies, one of Government’s leading economic advisors is suggesting that greater effort be made to get more international companies headquartered in Bridgetown.
Moreover, Avinash Persaud, Special Envoy to Prime Minister Mia Mottley on Investment and Financial Services, said the United States’ proposal for new global tax measures should serve as an incentive for Barbados to attract more firms to relocate here.
Persaud said the actions of countries constantly changing policies and blacklisting places such as Barbados was simply “anti-competitive behaviour”. He pointed out that “the world knows that the majority of money laundering takes place in London, New York and Zurich and those places are never on that list”.
However, he said now was not the time for complaining, but for Barbados to become even more aggressive in going after more global business.
“You don’t get anywhere by being a Moaning Minnie. We have to find a way of dealing with it,” he said.
Persaud explained that one of the measures Barbados took to counter the “shifting goal post” in recent times was to change the corporate tax rate to allow both local and international firms to pay on a sliding scale of between one and five per cent.
However, with the US engaging G20 nations to agree on a global minimum corporate tax rate, Persaud said the time had come to “move to a different playing field” as they seek to shift the goal post.
“The next thing we need to do is to actually make sure that businesses are headquartered here. America and the UK may decide to have a global minimum tax rate. That is currently being debated. Now, they can decide how they tax a Barbadian subsidiary of a British company, but they cannot determine how they tax a Barbados-headquartered company. So we need to bring these companies to Barbados to do real business in Barbados and be headquartered here,” he explained.
Persaud said in order to attract the businesses, several things must be done including training and certification of individuals to provide high-level skills, greater use of advanced technology and an improvement in the doing business climate.
Among the key measures being discussed in the US are a higher corporate tax rate on US firms from 21 per cent to 28 per cent, increasing the global minimum tax paid from 13 per cent to 21 per cent, limiting the ability of American multinational firms to avoid taxes by shifting profits to lower or no-tax jurisdictions, and significantly increasing taxes on wealthy investors.
In addition to those pending changes, Barbados has been placed on several blacklists over the years due to concerns about money laundering or tax compliance.
The latest has been the OECD Global Forum’s list for tax compliance, on which Barbados was deemed “partially compliant”, and the most recent UK list of “high-risk third countries” for money laundering and terrorist financing.
President of the Barbados International Business Association (BIBA) Derek Cummins said it seemed the OECD and others seemed to be constantly “bombarding small international financial centres like Barbados” with their various lists.
He said in light of this, the important thing was that Barbados “master what we control”, adding that while substantial strides have been taken to improve some areas more needed to be done.
“We have to make sure that while there are things coming against us, what we are able to define and make right and make exceptional here at home in Barbados that we do that,” said Cummins.
“So we have to master the products and services that we currently offer; we have to master the innovation and development of new products and services; master transparency and compliance; we have to master the certainty of our tax regime, the certainty of legislation, the certainty of processes and timing and cost in which to get things done.
“One critical one we have to master is our educational system. Are we developing the next cadre of professionals to take up the opportunities that exist out there and we want to bring to Barbados? And we have to master our welcome, our immigration practices, how we process people,” he added.
The comments were made on Tuesday during a Business Barbados media conference to explore the island’s potential to attract and grow the international business sector in a sustainable way. (MM)