Policy shifts key

For Barbados to successfully put itself in a position where it can attract more investment and international business (IB), it is going to have to consider a change in the way that it does things.

This is coming from the Executive Director of the Barbados Chamber of Commerce and Industry (BCCI), Carlos Wharton, who delivered opening remarks at the BCCI-PricewaterhouseCoopers (PwC) Business Luncheon: Global Tax Reform: How Do We Respond?’ at the Hilton Hotel Barbados.
He said that things like Global Tax Reform has had an impact not only on this island, but also other small island developing states (SIDS) and while initiatives of global co-operation by SIDS have reaped some benefits, these were short lived.

“Global Tax Reform always had implications for Barbados and by extension small island development states. One could recall that since 1998 the OECD efforts at reform in the area of Harmful Tax Practices threatened to undermine many international business and financial services regimes across the world. Efforts at global cooperation among small island states affected, and led out by Barbados, proved successful but only for a very short while.”

Furthermore, the founding of the World Trade Organization (WTO) also played a role in taxation, especially as it related to such areas as customs duties.

“The establishment of the World Trade Organization also had implications for taxation (particularly customs duties) and the options states have in terms of the application of internal taxes. Also recall that the dispute settlement body of the WTO has also ruled in a number of cases that had negative implications for the international business sector and international services.”

“To add fuel to the fire, things like Base Erosion and Profit Sharing (BEPS) only served to make this nation a less attractive place to invest in and do business with,” stated the Executive Director of the BCCI.

“New initiatives such as BEPS and the tough stance against principles such as tax avoidance and the sharing of information have again undermined the attractiveness of Barbados and other states from taking advantage of the global value chain,” he added.

“All of these things together have not had a positive impact on the balance of payments as well as the gross domestic product (GDP) of Barbados and it is with this in mind that a change in policy must be taken into consideration,” he stated.

“In my view, these developments have had implications for Barbados’ overall balance of payments as well as GDP. Barbados must consider significant policy shifts if it is to attract new investment and international business. The vehicles of the past are now old; we need new ones to take this sector forward.”

“This would entail the drafting of green papers that lay out what steps stakeholders need to take in order to move forward with respect to investment and trade; getting the technical expertise on board that would help to drive the development of new and innovative products and services aimed at facilitating economic growth; market these initiatives a way that catches the attention of potential investors and those involved in the IB sector and develop supportive and enabling tax and regulatory compliant structures,” said Wharton.

“How do we respond? Green papers are required that set out new policy direction in the area of trade and investment; implement the law in the manner in which it was intended [bilateral, regional and international treaties]; ensure that there are technical specialists available that are able to develop new products that are consistent with international best practice; marketing and promotion efforts have to be redoubled; and a new competitive tax regime must be developed which will require comprehensive tax reform,” he stated.