By Gerrino J. Saunders
Journal Staff Writer

The new Domestic Top-up Tax Bill 2024 can result in as much as $200 million in
new annual revenue for The Bahamas, according to Attorney General Senator
Ryan Pinder who revealed as much while leading debate on the new Bill in the
senate this week.
While Prime Minister Philip Davis said during debate in the lower chamber that
the new legislation can generate a minimum of approximately $140 to $150
million in new revenue annually, the Attorney General believes revenue generated
could be even greater, resulting in a budget surplus.
He said, “it is anticipated that this new tax regime can raise at least a minimum of
$150 million in new tax revenue, but hopefully much more than that. So my
anticipation is that it will be in excess of $200 million in new revenue for the
country, absolutely.”
Speaking to the Minister of Economic Affairs Senator Michael Halkitis who
agreed Pinder said, “Minister I think that puts us immediately in a budget surplus,
for the first time since independence.”
Pinder said, in passing the Domestic Minimum Top-Up Tax Bill, 2024 the
government is ensuring compliance with the OECD imposed standards committed
to by the Minnis administration.
He said the new tax laws will not only add revenue but has been framed in a way
for “national advancement economically and hopefully advancing the Bahamian
people.”
Mr. Pinder noted that there was wide consultations before the final draft was
agreed. He personally thanked those individuals and multi-national companies that
gave feedback and their input which when appropriate was applied during the
revision stage before new legislation was brought to the House of Assembly.

He said, “the level of detail and public consultation that went into this Bill and
framework for business income tax in The Bahamas has been extensive.”
Mr. Pinder wanted to leave no doubt that the Act is applicable to the entire
Bahamas.
“Let me be clear about this,” he said. “The Act is applicable to the entire Bahamas
inclusive of the Port (Freeport, Grand Bahama) area. Crystal clear; it must be
applicable country-wide otherwise there are genuine questions that exist as to
whether the legislation will qualify under the OECD rules and this would be a
failed exercise if we were actually implementing something that doesn’t qualify
with the OECD who’s mandating that you qualify with them.”
FNM Senator Darren Henfield the former Minister of Foreign Affairs began his
contribution to the debate lamenting the fact that The Bahamas must once again
“bow” to international entities to remain off their financial black list.
“With the passing of this Domestic Minimum Top-Up-Tax Bill—which was on its
way from the time that we were in office, we again bow to the OECD/G20 powers
of the world that continue to have their way in developing countries like ours that
are seeking to further carve out and maintain a respectable position in the financial
services sector.
“I’m afraid this will continue to be our reality until we figure out how to
organically grow our economy in a way that is resilient, sustainable and
impervious to unfair, injurious and dramatically invasive foreign interference. It
is, therefore, pointless for us to continue to bemoan the tactics of our competitors
who continue to move the goal posts and change the rules of the game as we are in
full flight.”
It is believed that at least 140 countries have signed on to the OECD Minimum
Top-up Tax regime.
Senator Henfield then turned his attention to the disparity in estimations between
the Prime Minister and the Attorney General on the amount revenue the new tax
would generate.
He said, “I was further taken aback when he (Senator Pinder) said that the revenues
generated would be in the region of $200 million, because I heard the Prime
Minister’s projection was that it would be in the region of $140 million, and now
$200 million is a big figure you know.”

Mr. Henfield who revealed there are currently approximately 20 multi-national
companies that the new tax Bill will impact said while the FNM supports the Bill
they do not agree with all aspects of it. “There are some things that we look at and
we are not so optimistic,” he said.
He said one of their main concerns is that the Official Opposition is not confident
the Davis Administration will use the new revenue wisely.
“When this Bill was moved in the other place it was accompanied by the notion
that this new found wealth will support the Government’s transformative, people-
focused agenda,” said Henfield.
“The Prime Minister actually went on to say whilst moving this Bill in Parliament
on November 6, that the vast majority of Bahamian people have experienced lower
taxes in the past three years. Not surprising coming from him though as many
Bahamians have concluded that he’s out to lunch, out of touch and completely
disconnected from the realities faced by Bahamians daily,” said Henfield.
He said, “no Bahamian be they PLP, FNM or completely politically indifferent
believes that this Administration will use the projected windfall of $140 million to
do anything about easing the burdens that they bear daily. After-all, this
Administration in the face of cries from myriad sectors of our society refuses to
remove the 10 percent VAT so mercilessly placed on the breadbasket, baby
products, female products and medicines, among other things. Removing VAT
from these previously zero rated items can be readily done if the Government was
so minded.”
Mr. Henfield also urged the government to cut the hundreds of millions paid to
consultants and retirees across the public service and government agencies
presently collecting both full pay and full pension.
Meanwhile, FNM Senator Michela Barnett-Ellis raised concerns that the passing of
this legislation could result in unintended consequences such as the relocation of
multi-national businesses to jurisdictions that are not subject to the same rules
there by shifting rather than eliminating tax base erosion.
During his contribution Senator Pinder revealed the government has introduced a
package of incentives that would encourage multi-national companies to remain in
The Bahamas.

Senator Pinder said legislation for the ‘Incentives Package’ similar to competitors
is anticipated in the mid-term budget exercise and will create qualified deduction
incentives to attract and retain multi-national companies that meet criteria for the
new tax as well as other taxpayers.
Examples of some of the incentives under consideration include: Extra-territorial
turnover credits – to attract headquarter businesses, Capital expenditure credits – to
attract capital investment in the country, Employee training credits – to incentivize
the enhancement of the Bahamian workforce and employees and local content
spend credit – to incentivize businesses to buy Bahamian.
Pinder said the government will also look to incorporate a shipping exclusion
which would exclude from the corporate income tax shipping related income,
which would be made up with a tonnage tax.
“We are working with the Ministry of Finance and The Bahamas Maritime
Authority (BMA) to frame what this would look like in the context of the industry
and our national flag registry. Implementing a shipping exclusion would set the
stage for major shipping and cruise industries to consider The Bahamas as a
headquarter jurisdiction for the shipping companies’ worldwide operations,” said
Senator Pinder.
He said coupled with the country’s strong maritime relationships and the BMA can
be a source of significant economic diversification and expansion for The Bahamas
as more multi-national companies that meet the new tax criteria call The Bahamas
home.