By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

A Cabinet Minister yesterday conceded it was “only logical” for the Bahamas to now re-evaluate its position on automatic tax information as a result of the European Union’s (EU) hardline stance, saying: “We want to make sure we do what’s best for the country”.

Hope Strachan, minister of financial services, who addressed an industry briefing on the automatic exchange of tax information, acknowledged that the Bahamas was being heavily criticised internationally for its approach to implementing the Common Reporting Standard (CRS).

The Bahamas has been seeking to do this through bilateral agreements without having signed the Multilateral Convention on Mutual Administrative Assistance (MAC) - a key demand of the Organisation for Econmic Co-Operation and Development, EU and its members.

Mrs Strachan added that this has created the perception that the Bahamas is deliberately holding out from signing the MAC in order to develop an unfair competitive advantage over financial services jurisdictions, and to attract undeclared funds to this nation.

“Our strategy for implementing the CRS has been progressing steadily,” she said. “In fact, we have accomplished much in a very short period of time. Although this has been acknowledged by the OECD, we must now consider if it is enough to allow us to meet our commitment to CRS implementation in 2018.

“The Bahamas has made a choice, and was by no means trying to have an unfair advantage, but had chosen the approach best suited to the financial services industry. We remain committed to that approach.”

Mrs Strachan told Tribune Business that the purpose of the industry briefing was to allow industry participants to hear directly from the OECD.

“We believe that the private sector, along with Government, will shape the policy going forward,” she explained. “The point of the industry briefing is to make a determination as to whether we will change our position on signing the multilateral convention.

“We want to do what is best for the industry and ensure that we have an industry that could survive. So many jobs ride on the fact that we have an industry that is vibrant, clean and compliant. We want to make sure that we do what is best for the country,” Mrs Strachan continued.

“I think it is a decision that has to be made after the widest consultation. Whether it be the incumbent government or another administration, the facts would be there, the consultation would have been had and the best advice would have already have been solicited.”

Tribune Business revealed earlier this week that the Bahamas is under growing pressure to bow to international demands that it automatically exchange tax information on a ‘multilateral’ basis, with the European Union (EU) and its members refusing to accept this nation’s preferred approach.

The Bahamas previously agreed to implement the CRS, the Organisation for Economic Co-Operation and Development’s (OECD) global standard for automatic tax information exchange, via a bilateral approach that involved negotiating agreements on an individual country-by country basis.

However, the OECD and its developed country members have been steadily increasing the pressure on the Bahamas to switch to the ‘multilateral’ approach, requiring this country to negotiate tax deals with all-comers at once.

The Bahamas has been left exposed by the decisions of Hong Kong, Panama and the United Arab Emirates  to switch from the bilateral to multilateral approach, which has left this nation as the last international financial centre (IFC) of significance that is sticking to the former.