By Fay Simmons

Tribune Business Reporter

jsimmons@tribunemedia.net 

The Government is targeting completion of the tax residency certificate product that will allow expatriate residents to prove to home jurisdictions they are domiciled in The Bahamas and compliant.

Michael Halkitis, minister of economic affairs, told the Senate in leading-off the 2025-2026 Budget debate that an inter-ministerial committee has been set up to complete the tax residency certificate's implementation.

“We continue to pursue implementation of our tax residency certificate. We have set up an inter-ministerial committee consisting of the Ministry of Economic Affairs, Ministry of Finance, Department of Immigration, Department of Inland Revenue, lawyers from the Attorney General's Office working together to serve clients and strengthen our jurisdiction, and we are looking to bring this initiative to completion,” said Mr Halkitis.

The initiative has been in the works for some time. Elsworth Johnson, minister of financial services under the Minnis administration, said in 2020 that The Bahamas will via the certificate give access to financial accounts and income records for foreign residents in compliance with global standards.

"By the end of 2020, the Ministry will launch the tax residency certificate," he pledged then. "This certificate will enable expatriate residents and investors to prove that they are resident in the Commonwealth of The Bahamas.

"Through this certificate, we will provide access to financial accounts and income records according to the Organisation for Economic Co-Operation and Development’s (OECD) Common Reporting Standards (CRS). The end result will be the elimination of opportunities for those who seek to use our financial systems for tax evasion and avoidance purposes.

"We are in the consulting phase of the certificate’s implementation and working to draw together the differing views of key stakeholders. This will ensure that the final version of the tax residency certificate legislation is the best version possible. Our efforts have been universally hailed by local and international observers alike."

TRCs, which have been talked about for some years, would have their own taxpayer identification number (TIN) and confirm that the holder has been properly domiciled in The Bahamas. Besides confirming this is their main place of residence, these certificates will help certify the holder's compliance with their home country tax laws.

And they will also help to address OECD claims that this nation’s economic permanent residency product is in danger of being abused by tax evaders. The OECD had sparked major concern within the Bahamian financial services industry and wider economy in 2018 when it included The Bahamas’ key investment product on a list of regimes that could undermine global automatic tax information exchange.

Many viewed it as a further broadening of the OECD’s efforts beyond pure tax information exchange and transparency to investment products and regimes it deems potentially harmful to the global crackdown on tax avoidance and evasion.

Mr Halkitis, meanwhile, yesterday said financial services legislation, including the Digital Assets and Registered Exchanges (DARE) Act are constantly assessed to ensure they are maintaining The Bahamas' competitive edge without compromising international standards.

He said the US passing legislation to regulate crypto assets presents another opportunity for the jurisdiction to collaborate and attract new clients.

“Recently the United States has passed…Congress legislation that would regulate crypto assets. For a long time, they were not regulated in the US, and so they are now beginning their process of regulation, and there's an opportunity again for us to collaborate with them in terms of making sure that our regulation is consistent with what they want to do and opportunities that arise for companies to be a resident in The Bahamas,” said Mr Halkitis.