One of them relates to the Tax Information Exchange Agreement [TIEA] with the United States, a portion of which comes into effect on January 1, 2004.
The bill was read for a first time in Parliament Wednesday.
The government had begun circulating the TIEA bill on October 8 for feedback and public comment. According to Prime Minister Perry Christie, House members are going to hear from industry professionals about it before debate begins.
“We have had wide consultation on the agreement and feel that it would be to the benefit of Parliament to arrange sessions… for those people to address parliamentarians,” Mr. Christie said in the House of Assembly last week.
The bill is designed to crack down on tax evaders by tearing down any obstacles to exchanging tax information with the United States, one of the issues on which American authorities are most adamant.
It’s a sensitive struggle between offshore financial jurisdictions holding on to their banking secrecy while complying with international pressures for transparency about those who try to aggressively avoid paying their taxes.
“The OECD and the United States will continue to press for Tax Information Exchange Agreements [TIEA] with respect to both criminal and later civil matters,” said State Minister for Finance James Smith recently about their unwavering position.
It’s also a priority for a grouping of the world’s richest industrialized nations, the Organization for Economic Cooperation and Development [OECD], that is waging its own campaign against what it calls harmful tax havens.
The Bahamas signed a TIEA with the U.S. in January of last year to help freeze terrorist funds. One of the provisions of the agreement relates to a taxable period for a criminal matter that begins on January 1, 2004. The same for a civil matter relates to a taxable period commencing on January 1, 2006.
The TIEA would establish procedures for the Bahamas to comply with U.S. tax requests, but there are some stipulations. The requests must be made in writing, properly identify the taxpayer about whom the information is being sought, include the particulars of the information, identify the person who possesses it and state what the information would be used for.
The written request should also clearly identify whether the information is wanted to assess taxes or investigate the prosecution of a tax offence and in applicable cases state what law has been contravened.
The United States has also concluded tax information exchange agreements with these offshore financial centres: Antigua and Barbuda, the British Virgin Islands, the Cayman Islands, Guernsey, Isle of Man, Jersey, and the Netherlands Antilles.
The Bahamas Government has also given the OECD its word that it would improve transparency of regulatory systems. But Bahamian authorities have made no commitments for a TIEA with the overseas grouping.
The House also has to deal with the amendment to the Financial Transactions Reporting Act and a new bill relating to the insurance sector. Insurance companies have been saying that if the government does not pass into law a liability ceiling, they would not be able to issue insurance certificates come next year.
Early in the new year the government also expects to introduce a resolution for $7.5 million in guaranteed funds for the national flag carrier Bahamasair to purchase the two Dash 8 aircraft.
The Prime Minister was not in Parliament when the House of Assembly reconvened on Wednesday. During the last sitting of Parliament, the Prime Minister indicated that he would be out of the country for a few days keeping important appointments with world leaders.
Mr. Christie was in the United Kingdom Tuesday where he joined CARICOM counterparts for a breakfast meeting with British Prime Minister Tony Blair.
He flew to Nigeria yesterday to attend the Commonwealth Heads of Government Meeting [CHOGM]. It will be his first CHOGM attendance.
Before returning home, Mr. Christie said he also plans to keep a commitment in Florida where he is expected to address the United States backed Third Border initiative at a platform at the invitation of Governor Jeb Bush.
Before leaving, Mr. Christie indicated that House members might have to prepare for a more hectic legislative sessions until the end of the year to accommodate the passage of the three critical bills.
The Bahama Journal
