By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A BAHAMIAN financial services provider yesterday slammed the IMF's "absurd" conclusion that this nation has minimised the economic impact of the sector's contraction.

Paul Moss, principal of Dominion Management Services, told Tribune Business that the job losses alone showed that the International Monetary Fund (IMF) was "dead wrong and dead off" in its findings.

Responding to the paper that concluded the Bahamas had "managed" well the 65 per cent decline in bank and trust company assets in the five years to 2016, and contained the "spillover" impact, Mr Moss said he and many other executives "certainly don't recognise" such a scenario.

Warning that the financial services industry was "in a downward spiral" and "will surely die" under its present structure, the Dominion chief said proposed regulatory fee increases would only further drive up the Bahamas' cost of doing business.

He suggested that the Bahamas also reserve company incorporation and administration services for locally-owned firms, and stop the banks and trust companies "encroaching" on this revenue stream. "I certainly don't recognise that," Mr Moss told Tribune Business of the IMF's conclusions. "I was in the United Arab Emirates, and spoke to the Crown Prince and others. They said that when the IMF comes to them they take out what is useful, and reject what is not. This is clearly what I recommend to the Government of the Bahamas.

"The IMF is correct in its assessment of the way we ought to go with a low rate corporate and income tax. But it is incorrect to suggest that the contraction, to the extent they suggest, has not had an effect on the industry and wider economy. It's absurd.

"They are dead wrong and dead off. Anyone with an inch of sense can see that to suggest a contraction of 65 per cent has no effect is absolutely ludicrous."

Mr Moss continued: "I can tell you there are many people without jobs because, right now, there not sufficient opportunities within the country because of the contraction. "You speak to anyone in this industry and they will tell you the industry is engaged in a downward spiral, and they don't know how this will come back and if it ever will come back. If we keep it as presently structured, it will surely die."

That is a reference to Mr Moss's belief that the Bahamas must switch from a 'no tax' to 'low tax' corporate and income tax platform, both to shed its 'tax haven' perception among G-20 members and enable it to adopt to the new 'tax transparency' environment.

"It's had a terrible impact," he reiterated of the financial services industry's shrinkage since 2000. "People no longer in the industry are trying to find space and they can't because there is no growth.

"We have let Bahamians go, they are not working, and some have not been working for years. I don't know what the IMF are getting at. It seems to me that the IMF and others are wanting to see the demise of such international financial centres.

"I can never say that downsizing we've had over the last few years has not had an effect on the industry. It's absolutely ludicrous."

Mr Moss said his company received electronic and 'hard copy' resumes from Bahamians seeking work "on an almost daily basis", and said proposed regulatory fee increases - set to take effect in the New Year - would only add to the coming burden from automatic tax information exchange and enhanced anti-money laundering regulations.

"It's going to drive up costs. It's going to make it even more difficult for businesses to exist," he told Tribune Business. "You also have the encroachment by the banks and trust companies, doing business that ought to be reserved from them for financial and corporate services providers."

Mr Moss said banks and trust companies enjoyed an unfair advantage, as they were able to enter the company incorporation, management and administration business, yet smaller, often Bahamian-owned corporate providers were unable to do banking business because they did not hold the necessary licenses.

"That ought to be reserved for the average corporate service provider, who is Bahamian, and given to Bahamians so that they have an opportunity in this industry by becoming registered agents and company administrators," he told Tribune Business.

"I'm not sure we understand the industry. We don't have a proactive approach. We're reacting every single time, and not proactive to see what are the headwinds for us to attack. It all comes down to transparency and the shedding of the tax haven status, but we seem impotent to do anything about it until the persons from the OECD and IMF come cracking down on us."