There is more to Barbados as an international business jurisdiction than a low tax rate.
That’s the message Minister of Industry, International Business, Commerce and Small Business Development, Donville Inniss, says is imperative that Barbados broadcast aloud and abroad for all to hear. He made this clear as he suggested that the low tax rate marketing strategy could actually be doing the country more harm than good. The International Business Minister made the point as he gave the feature address at a seminar hosted by the Barbados International Business Association at the Savannah Hotel on ‘What Businesses Need to Know about Base Erosion and Profit Shifting (BEPS) and Double Taxation Agreements (DTAs)’.
“The OECD [Organisation of Economic Co-operation and Development], the Forum is looking to see are we just attracting businesses because of the lower tax rate. And let me say that part of the deliberation today must be an indication to you as to what it is that we are proposing to do to address the issue. But we also want to hear from you as what you think we ought to be doing,” he said.
Inniss added, “I have been contending for years that our marketing efforts as a jurisdiction should not continue to be centred around the lower tax rate.
We may very well be shooting ourselves in the foot and doing harm to us as a domicile if our marketing effort is focused almost exclusively on coming to Barbados because we offer a very low tax rate. Barbados offers much more than that tax rate.”
As such, the minister, contending that a new marketing strategy is critical, also took issue with the fact that the agency tasked with marketing the International Business sector is not part of the Ministry of International Business. Inniss said this has been a major concern for him for many years and he is adamant that the matter needs to be addressed, as there is the risk of losing the connection, directive and policy perspective that is required to advance the sector.
“Our marketing strategies must be relooked to ensure that we are saying the right things, to the right people, in the right markets. I don’t think we are there yet… So even as we go forth, we can’t keep saying, ‘Come to Barbados because we have a low tax.’
We want to say, ‘Come to Barbados because we offer substance to your business,’” he said.
Turning his attention to the Organisation of Economic Co-operation and Development’s BEPS initiative, Minister Inniss said efforts by countries to exploit gaps and avoid taxation have been going on for many years and has been driven by countries feeling that they are losing out on significant revenue that is needed to keep their economies going. With that in mind, he said the BEPS initiative offers an advantage to Barbados, as we can promote Barbados as a “domicile of substance”.
“We have competent professionals here to run your businesses; we have office space you can operate from; we have flights in and out of Barbados; we have a banking system that works… So one of the solutions we will have to wrap our minds around quickly is our definition of substance, and it may mean that some of the companies that are not looking to offer substance may have to find another domicile to go to. Because it is better for you to have 100 companies offering a great substance in our domicile, than a thousand that are really are not doing anything of significance,” he maintained.
Article compliments The Barbados Advocate – Saturday, September 2, 2017 (Page 2)