BUSINESS MONDAY: WHAT WILL REVIEW SHOW?

THIS country’s International Business and Financial Services (IBS) sector will be one of the areas that will be dealt with in this week’s Central Bank of Barbados (CBB) review for 2019.

The IBS is Barbados’ second largest economic sector and the focus is expected to be on how well it did over the last year following the major initiatives the Government undertook in 2018 and early 2019 to correct some of the shortcomings highlighted at the time.

Faced with pressures by the European Union and Organisation for Economic Co-operation and Development (OECD), the Mia Amor Mottley administration made sweeping legislative changes to ensure that Barbados complies with global regulatory framework and that the sector was not left behind.

One of the key decisions taken was converging local and international tax rates effective January 1, 2019, and according to CBB Governor Cleviston Haynes, should be broadly revenue neutral, meaning no more or less revenues will be accruing to Government. That will be the test when he meets the media on January 29, 2020.

Minister of International Business, Ronald Toppin, around that time, promised that Barbados will be compliant with OECD and EU requirements “at the end of this year (that is 2018)”. He said that to achieve that “involves taking the bold step of removing the distinction between offshore and on-shore corporations”. That signified making Barbados more competitive to secure new foreign investments and subsequently, new businesses in that segment of the economy.

The bone of contention at the time the changes were made, was the so-called Base Erosion and Profit Sharing (BEPS), which one commentator called a “creature of the G20 who mandated it”. It was revealed that the G20 tasked 44 developing countries with creating and implementing the policies and rules that are now being implemented globally.

Against that background some ten pieces of legislation, as outlined by Toppin, were enacted. These include abolishing the International Business Companies (IBCs) Act, amendments to the Societies with Restricted Liability (ISRLs) Act, provision that all IBCs and ISRLs become Regular Barbados Companies and Societies, all companies and societies will in future be able to conduct business locally, regionally and internationally; effective January 1, last year, entities earning 100 per cent of their income in foreign exchange will be entitled to receive a Foreign Currency Permit, affording them the same benefits they enjoy; the Exempt Insurance Act was to be replaced and the Insurance Act amended to remove the provisions for the entities known as Qualified Insurance Companies; repealing the International Financial Services Act; and among other things, amending the Shipping Act and renaming the International Trust. Inflows into Barbados amounted to $447.7 million compared to $430.0 million in 2017. (JB)