BACKGROUND – LANDSCAPE OF OPPORTUNITIES
BACKGROUND – LANDSCAPE OF OPPORTUNITIES
COVID-19 has radically changed the fortunes of countries around the world with major challenges expected for the near future. The Bahamas and the rest of the region have significant headwinds to confront; however, it is not all doom and gloom as there are also some tailwinds to be considered in any balanced assessment. Obviously, the level of resilience of countries vary significantly and consequently the rate of recovery will show notable differences. The Bahamas, like other countries, responded to the health crisis, which morphed into a global economic crisis, seeking to mitigate its impact. While there are various levels of criticism as to sufficiency of amount and effectiveness for the management of the processes, Government support for the business and social sectors was evident. Efforts to curtail community spread through lockdowns were prominent with the expected adverse impact on the economy. The national narrative focused on the health of the economy, it dominated national discourse with differing flavours of trepidation, negative outlook, optimism, over-optimism and prognostications of fundamental structural and fiscal shifts needed.
The focus now, with the curtailment of new cases, the emergence of a number of viable vaccines, is on post recovery. This position may be seen as premature by some, given the possibilities of a third wave and the impact of new variants. However, it is my view that The Bahamas should start directing all energies towards how the country will recover and sustain such recovery over the long term. If the country is to experience reasonable growth beyond the historical norms, it now needs a pragmatic, imaginative and highly transformational suite of treatments. These treatments must fully take into account the economic and global landscape, the observed vulnerability of the highly tourism dependent economy, with eyes firmly focused on the growth and development of the country, fostering economic equality, battling the menace of poverty and enhancing the future well-being of the citizenry.
It is just about one year now since the country started to feel the first real direct effects of COVID-19. All the urgent discussions conducted over the last year, the foreshadowed policies, and the explored strategies by various groupings and taskforces must now start seeing effect through execution. Time is at a premium. The approach going forward cannot be settled on business as usual. It is essential that a way be found to develop a broad based consensus around the issue, which must be addressed to move the country forward. The ideas of resilience must remain central to ongoing efforts; bringing clarity and certainty to the investment arena is an imperative. Creating a broad based understanding of the effects of the current economic structure, speaking and taking action to address the vulnerabilities, including the taxation regime, is fundamental. They must be honest and authentic evangelizing the need for the engagement of the national collective genius to solve the country’s problems. Where the country finds itself today provides an unfortunate but extremely valuable moment for finally locking in a national strategy to serve a true roadmap to the future, one accepted and committed to by all and sundry. The landscape, by all measures or assessment, is challenging and unsettling. However, it presents a glorious opportunity for moving speedily and pragmatically forward. Truly the options available pre-crisis are disappearing or at least their potency reducing. With our proverbial back against the wall and largely only one way to go, the decision-making should be more straightforward. They will not be necessarily less complex but with the options limited, the friction imposed by competing objectives, which up to now made that process more difficult and have arguably caused delays in many areas, universally agreed on, but remain languishing for decades. The reduction in options should make these tensions more easily managed.
In previous articles, I spoke to the possibility of economic recovery for the Bahamas stretching out to 2024. In fact, I never accepted the idea that there would have been a six-month recovery in 2020. My position was then, and remains, that this crisis for the Bahamas will be an 18-24 event, at best. It is not a comfortable proposition but one that must not be dismissed. The efforts to secure a more resilient economy must move ahead full speed. A part of the bold and generational shifting spoken of by the Prime Minister earlier in this crisis must be how the country solves its challenges on a bi-partisan basis and in ways that embrace all strata of the society. Policy makers must be ready to make the tough decisions and push the envelope to uncomfortable levels without harming the economy further. To solve the problems faced by The Bahamas, sound treatments have to be brought to bear on the growing debt, low GDP growth, the concentration of export earnings and addition of new revenue sources, low productivity, and public sector reforms. The country needs a more resilient economy, a broader fiscal space and a deeper economic breadth. Debt management and fiscal consolidation is a critical part of the process, however, without growth the desire for a more robust, resilient economy with the ability to better absorb the effects of external shocks will remain difficult to achieve.
THE SIX-MONTHS REALITY
The difficulty indicated above is underlined by the current fiscal state of the country as borne out by the recent half-year budget presentation. With an expected 16.2% decline in GDP in 2020 to be followed by a 2% and 8.5% growth in 2021 and 2022 respectively, the country's finances will be under pressure. The growth over the next few years is clearly insufficient to reverse the 2020 loss and it is expected therefore that government revenue, left unchanged, will be curtailed. This holds important implications for the way forward. Based on the six-month outturn it is likely that the projected deficit of $1.3B will be surpassed. At the half-year mark tax revenue stood at only 38% on the annual budget. While there is seasonality to government revenue and a linear extrapolation is ill advised, a subjective conclusion that we will get nowhere near the 100% mark in twelve months should enjoy little or no controversy.
Tax revenue contracted by over $400M to settle at $673M, with the significant contributor, VAT seeing near 50% decline. While the banking system shows no sign yet of any stress with significant levels of liquidity, external reserves up by over $600M to $2.4B, it is sobering that up to November 2020 tourist arrival recorded a 78% decline. That latter measure provides important context of the uphill battle faced by the country if a significant near term recovery is not experienced in the touristic sector.
At the current trends, taking into account the above caveat, the deficit is trending toward $2B. This would be a significant shift in an environment where the global demand for debt is high and the country’s capacity to borrow, without increases in tax revenue, weakened because of a consistent buildup of debt. With debt to GDP, and contingent liabilities and guarantees standing at 79%, the country saw net borrowing of 1.2B in the face of pressures on expenditure for continued social and private sector support. The trends are unsustainable and this is why there is often the articulation of us being okay when tourism returns. Unfortunately, such discussions are not neither sufficient nor strategic enough in response to the deep economic malaise the country faces. Without a doubt, it needs some good fortune. Now more than ever the country needs the USA to be good and healthy. Now more than ever we need massive amounts of tourists to head to our shores. Now more than ever the country understands the need for more diversified streams of foreign exchange revenues. A deficit of $736M or 55% of budget unambiguously underlines this. The country is at a place where the only great near term news will be a return of visitors. The fiscal fundamentals deliver a clear indication of the work ahead and if nothing else, it should facilitate understanding of the urgency needed in dealing with the challenges and appreciating the perilousness of what may lie ahead.
Often we hear commentators or officials talk about the “come back” of tourism as a means of alleviating The Bahamas’ challenges. Here is why that trending response is an inadequate one. The demand side shocks we are experiencing are abnormal and driven by the need of countries to protect their citizens, the source of our tourism. While there is nothing policy makers can do about that, there is the need to recognize the gravity and start talking alternatives. As it relates to revenue, the conversation is in many ways an apple and orange conversation. We will not be able to replace like with like. The quality of revenues at risk during this crisis is much broader than tourism revenue. The thinking therefore must be done in the context of the widest sources of vulnerabilities, a practical search for new possibilities, and potent strategic responses. The fact is COVID-19 is presenting a real life scenario analysis of what happens when a major aspect of the economy becomes significantly disrupted. In my view, there are some important considerations. What if the tourism sector never returns to pre-crisis levels? What other source of national income will we exploit to make up the difference? With tourism, the nucleus of economic activities, unsettling employment, what will the country do if this becomes a long-term effect?
It is certainly not an easy place to be. This is a classic case of nearly all the eggs in one basket. The solutions are not easy but first we have to accept that solutions are needed. To go forward, post COVID-19, with the same focus and level, dependency on tourism will be near madness. Now you ask what we will replace it with. I say we are not in the business of replacing anything but rather that of broadening the canvas of earnings and reducing the concentration of revenue sources. The object is to diversify within and outside of tourism, to add other streams. Again, you ask how. To this I proffer, start rethinking the entire economic arrangement of the country. It is time for a shift. It is not going to be easy at all but the alternative of not doing anything will be harder. These economic episodes are emerging more rapidly. Economic cycles appear to be shorter and more vicious than before. There are important shifts of greater connectivity, seamless movement of information, a more connected global economy. We must remain keenly aware of the dynamic environment in which we operate today and the responses required to navigate this new norm – a norm of consistently high levels of uncertainty and volatility. What will the world look like in five years and importantly, how will the country be positioned to respond to it? The answer to that latter question has a lot to do with the actions we take today.
TIME FOR ACTION
There has been much talk and discussion about what will happen next. In my opinion, it is time for national, bi-partisan, broad consensus action. The injection of election energy seems to have taken full grasp of the narrative. This could prove detrimental to the longer-term wellbeing of country as the need for focus and timely decisions are gravely fundamental and the normal tensions of election campaigning may adversely impact it. The natural adversarial nature of party politics renders the timing challenging, within the context of the crisis, as it reduces the possibility of a necessary meeting of the minds on issues that are fundamental to the future of the general economy. Despite this, it is time for unequivocal action. The stakes are high, the issues are complex and there is a need for near clinical precision in securing solutions, chief of which is how to find additional revenues and broaden the earning potential of the economy.
Here is why. The country is not only faced with finding ways to secure recovery of the normal economic activities, create diversification of revenue, ushering unprecedented shift through digital transformation, address the current observed structural weaknesses and vulnerabilities but also the possibility of radically changing one of its most important value proposition as an offshore jurisdiction, no income or corporate tax. No matter how we slice the pudding this issue is so fundamental to sustainable recovery that it is painful the extent to which the national narrative appears to skirt around the issue.
Let us look at why I have taken that position. The issue of imposing taxes is extremely emotive in The Bahamas. Simple thoughts of the imposition of income tax in any form is a sufficiently complete transgression, in the minds of many, for you to be punished in the town square. There is real tangible fear that going down this path will significantly erode the standard of living, adversely affecting the fortunes of citizens and residents and harming the overall economy in general but more specifically the financial services sector. The question to contemplate though is whether this is really so. Regardless, in order to convince persons to step forward into anything new you must first help him to fight or at least manage whatever is his fear about the new situation. It is not sufficient to tell them that they should not be afraid. Honest and objective behavior will conclude that there is a real fear, broadly speaking, or at least a hardened position which outright rejects the notion of that form of taxation. The conversations must therefore be designed to address the issues and sensitive enough to respect existing concerns.
There is a healthy amount of discussion taking place as it relates to the possibility of the country needing to take advantage of an IMF restructure program. We can only hope that it does not only come to that. However, having regard for the current state of the finances of the country it is not a matter that should be dismissed. I am aware that there will be those who argue that there have been successful programs elsewhere. Jamaica successfully completed two three-year programs and Barbados is currently doing relatively well in meeting its targets under the current program. However, there are important differences as it relates to the level of diversification in those countries and the extent to which they have alternative sources of export revenue. For The Bahamas we should start our analysis by asking where, in an IMF program, will the potential additional revenue come from, given limited options for exports. Beyond austerity actions of reduction in spending, increases in taxes, and privatization of corporations where will the gain be derived from? We should therefore work as assiduously as is possible to avoid getting there. The country’s increasing debt stock though suggests that the possibility does exist.
The country has a growing debt stock of near $10B and a recurrent annual interest payment of around $300M. This though, must be assessed in light of potential tailwinds as assessed by economists, for example, the impact of vaccines; pent up demand for travel and tourism; creative destruction and transformation in the digital space; and significant startups in the SME. While those potential tailwinds will moderate challenges if we continue on the current trajectory I believe that there will be little choice but to raise taxes, the administration will have limited options to do otherwise. Ask yourself, in the face of the current circumstances, where does government get money unless the country finds new revenue to expand the tax base or raise taxes from the current base to fund spending; or cut spending and raise taxes? In other words, what aspect of an austerity program will the government choose?
However, note that the Bahamas is at a tipping point. The current system of taxation has served the country well for a number of years under conditions of relatively high income, low debt and low population. Despite being highly regressive and very disadvantageous to the poor, on a whole the taxation system held. However, in the face of significant revenue shifts, with the potential to run for some time yet, there are some concerns. With a larger population and more persons, in absolute numbers, operating at or below the poverty line, where regressive taxes consume most of their income making wealth creation difficult thereby creating a vicious cycle for poverty, the time is definitely right to start considering a shift to more progressive means of managing earning tax revenue. The time is here to take a close look at the idea that “those who can pay more should pay more”. That discussion naturally leads to income tax, in whatever form decided, a progressive system of taxation. The problem with this is that not having income tax (or seen as a low tax jurisdiction) is so fundamental to where The Bahamas is now and the current construct of the economy. Returning to the fear factor mentioned above, the imposition of income tax, especially corporate tax, could be seen as removing one of the legs of a three-legged stool. It may be possible to remain seated but it is more likely that you will do so very uncomfortably or in fact spend all day falling. I believe we are at a tipping point and the government (this and any future administration) really have some very hard decisions to make. There are some radical shifts which are needed and until and unless these are done the country will struggle to find that new sweet spot for funding its existence.
At the end of the day, it will come down to the mathematics. Annually, the government has to secure approximately $3B or so in revenue. Historically about $500M of that was deficit spending funded by debt. The rest comes from taxes. In the last fiscal as mentioned before this increased to $1.3B. In the face of a mostly importing of physical goods and export of services, VAT or custom duties are very effective for the domestic side of the economy. However, there is the possibility that income tax (personal and corporate) which could expand the tax base by making an excursion deeper into the offshore portion of the economy. That is where the challenges lie. That is where the delicateness of the decision to be made lies. This introduces an important point of fundamental shift in one of the arrangements that renders The Bahamas an attractive international financial center. It does not matter how we scream or how much we lament the perceived unfairness of any particular arrangement, it appears that in the current circumstance additional taxes will be levied in one form or the other, taxes are likely to increase. In the national narrative, we spend a lot of time counting the beans in the bag and lose sight of the need for there to be a proper assessment of which bag of beans we should be selecting. The current bag is regressive and disadvantages poor people and small businesses. There is another bag that is more progressive, a hybrid bag. That bag however is like a boogeyman to many and honestly, there are good causes to be concerned about it.
CREDITORS, THE EU AND INCOME TAX
In the height of the crisis, a prominent economist first raised the idea of the possibility of The Bahamas entering into an IMF arrangement. The response then of the Governor of the Central Bank is very instructive. In seeking to assuage the tension created by that statement he declared that before creditors get hurt taxes will be levied (paraphrase). Prominent commentators have out-rightly stated that there is a need for income tax or lament the inequity of the current regressive tax regime or the inadequacy of the current regime in financing government programs. There have been questions posed to policy makers as to whether income tax will be (or at least should be) considered. It would appear that at least in certain quarters the conversation around income taxes is becoming a bit more comfortable and definitely more serious.
It is my view that despite the lack of direct responses from the political directorate, the time is here for a real shift in the tax regime. The current circumstances would dictate that we take hold of the “boogeyman bag”, so as not to bring greater harm to a very vulnerable segment of poor persons. Nevertheless, even if that bag is rejected there may be increases in some other areas if the larger concerns surrounding debt default and entrance into structural programs are to be circumvented. I believe that the near term future of The Bahamas rests significantly in the strategic moves which will be made over the next few months. It is for this reason that we cite the obvious “election season” given the propensity for shifts in policy positions or delays in making decisions which may be inconsistent with the desired outcomes of parties. It is easy to accept that in close proximity to an election the likelihood of tax increases becomes difficult to imagine. It is also easy to accept that any administration shepherding the change to income tax, or foreshadowing the same, is likely to suffer a significant level of disfavor from the citizenry. The possibility therefore of any movement in this area, within the next twelve months, is therefore minuscule. Note however that none of the major parties will explicitly state that income tax is off the table. Any such declaration would be out rightly irresponsible and lacking in careful forethought. The players are aware and therefore, while I believe they will work hard to find ways of not going this route, will not be definitive in excluding the option. Ultimately, regardless of the changes to the level of tax levied under the current system it suffers important weaknesses to be able to sit squarely on the four principles of a good taxation system, fairness, certainty, convenience and efficiency. Commentators, policy makers and others readily state that the current tax regime is inequitable. We readily accept this and the fact that it is also insufficient, either in absolute terms or because of the level of effectiveness of its administration. A regressive tax regime in an environment where economic scarcity (persons suffering longer term from economic fallout) may be very prominent will always fail to meet the fairness (equitable) criteria.
Chief amongst the challenges faced by the country are debt and threat external organizations. The state of the country’s debt draws our attention to what could emerge should there be no rebound. As noted above there have been important questions raised by man about the sustainability of the country’s debt. With national revenues where they are today and the challenges we have (temporary but there will be lingering effects) creditor’s well-being will at least put adverse pressure on the provision of other public goods and services. In other words, creditors must be paid first and the country will never jeopardize its credit rating by defaulting on debt. That simply does not happen in this region. In the recent budget presentation, it was revealed that government revenue to GDP is in the region of 14%. This is relatively low, definitely an impact of the downturn. However, historically the Bahamas has always lagged peers in this metric. The longstanding, and recently renewed, discussion has been the need to increase that to 20%. If this is correct and necessary, the question is how we will get there. One thing I am confident of is that we should all start getting prepared to pay a little bit more. The only way to get there, in the face of all we have discussed to this point, will be through new taxes, unless it can be shown that more effective administration can and will produce the difference between the two yields.
How it is done is where the rubber meets the road and the devil will be in the details. However, we certainly are at a point where I think it will be seriously considered. It is important to note that some of the factors that made the Bahamas vibrant and highly successful have changed and continue to change rapidly. Factors such as population size, quantum of debt, rate of growth of debt, more expansive and expensive public services demands, and potentially declining national revenue. All these exert adverse pressure on the current revenue space. With a very limited tax base it is akin to solving a mathematical problem, if too many factors are held fixed the desired solution will not be derived. With changing demands and the pressure of debt repayments and lack of revenue it is reasonable to anticipate an upward shift in the level of tax burden to be borne by citizens and residents. Any honest discussion on the breadth of the tax base though, would never ignore the offshore segment. The segment holds great potential for broadening the tax base, however, there are also significant challenges that could follow as such moves will disrupt the settled position of The Bahamas value proposition in that arena.
While one would expect a reasonable weighing of the pros and cons, there is an important wrinkle, with which The Bahamas must contend. This requires a level of urgency and seriousness that could render moot, everything we have discussed to this point, to change or not to change the tax system. In fact, it is so important that once one develops a full appreciation thereof, it would undoubtedly lead one to question why there is not greater effort in this direction. The European Union (EU) recently lamented the fact that countries such as The Bahamas was removed from its black listing in a manner which it described as being based only on making ‘minor tweaks'. The EU has emphatically stated that by the end of 2021, review this criteria and the expectation is that the changes will strike closely at the heart of the country’s financial services industry. Based on the EU’s standard, The Bahamas is dead center in its crosshairs, as it relates to its ingoing harmful taxation campaign. The criteria for identifying a jurisdiction with potentially harmful measures include an effective level of taxation that is significantly lower than the general level of taxation in the country concerned; tax benefits reserved for non-residents; tax incentives for activities, which are isolated from the domestic economy and therefore have no impact on the national tax base. This exists in The Bahamas and plays out in the offshore financial sector. At the core of most decisions is the benefit to be derived because of no existing corporation or other forms of income taxation.
The EU has concluded that its process of blacklisting and removing jurisdictions requires greater transparency. The Bahamas and many others who have been adversely affected by the process have always maintain this lack of transparency as a significant negative. This call is certainly not in response to our argument but rather a self-serving effort to help address what the EU considers being an ineffective process for the blacklisting of jurisdictions. The EU has initiated reform of the overall blacklisting process, together with refining the definition of harmful tax practices and the listed criteria thereof. Various institutions have proffered recommendations as to where they think this should head. Oxfam International, for example, recommends “blacklist zero and low corporate tax jurisdictions: make zero and low corporate tax rates a standalone criterion of the EU tax haven list. Include economic analysis to identify harmful regimes. Use levels of foreign direct investment and passive income as red flags for the identification of tax havens. Properly screen EU countries: EU countries must be held to the same if not higher standards than non-EU countries''. The arguments offered by the EU, as it seeks to give greater potency to its effort, parallels this. It states “criterion to judge if a country’s tax system is fair or not needs to be widened. Countries should not be removed from the blacklist if they only make symbolic tweaks. Additionally, a zero percent tax rate policy should automatically lead to being placed on the blacklist.”
If the above materialized at the end of the year then certainly, The Bahamas financial services sector will see some level of disruption. It begs the question therefore, ‘What exactly are we doing at this time?’ Beyond concerns about the usefulness, suitability, equity, regressive-ness of our current tax regime, there lies a potential external threat which has the ability to impose on us what we seem fully committed to avoiding together with adding a level of uncertainty to our second most important source of export. The new pronouncement by the EU on the black listing criteria (no country with zero corporation tax should be left off) could add great potency to their campaigns against jurisdictions such as The Bahamas. The proposed criteria for a 12.5% minimum effective tax rate together with "zero rate and you are on the listing" is certainly designed to be a major game changer in their effort.
The EU previously indicated that it had its foot on the neck of The Bahamas, a foot it will not move until it gets its way. This together with the idea that small tweaks will not get a jurisdiction off the blacklisting hold important implications for The Bahamas. Will we be forced to implement corporation tax to accommodate the survival of the financial services industry? While there are great arguments to be made for reclassification of current tax and charges such that the financial impact of any tax burden remains relatively unchanged, it is my view that any introduction of corporation tax of any amount, fundamentally shifts the value postposition of the financial services industry (offshore segment). This is why, in my opinion, the current public discussions on taxation are inadequate. Forced into implementing this form of income tax, the countries will have to face its ravages without having the chance for careful deliberate analysis and full comprehensive assessments. While undoubtedly we would have to be given some time to implement any program, the urgency, which may be created because of being back on a blacklist, creates the possibilities for mistakes, over reach and missteps.
I believe that the time is right to start having the national discussion, which confronts this head-on. Any potential changes would be so radical and culture shifting that early, clear and open discussion leading to a sound understanding and support for acceptance or rejection is definitely needed. Again the scope of the long term rejection of corporation tax, a form of income tax, is very limited and could quickly become non-existent should the EU follow through on its “threats”. We understand and appreciate the unease and hesitancy involved. However, given the timeline proposed by the EU I would recommend the following:
● Initiate a clear and focused conversation, especially within the financial services industry, on what the issues are and the options facing the country. The reality is that just as the EU may apply pressure should the business model and strategic objectives start to feel adverse friction, the sector too will become a source of immense pressure for the policy makers. The possibility of ultimately a retrenchment in business and economic activity in this arena should not be ignored. In the first instance discussions focused on bringing clarity and more importantly greater certainty to the sector is a strategic imperative for the country. Outside that narrow sector, selling the idea of any form of tax directly affecting income will be an uphill climb and therefore the conversations with and messaging to the citizenry will require careful attention.
● Create a full study of the tax system with a clear focus on alternatives and the need to address inequities. Accepting that there will be no levying of income or corporation tax prior to the election, constitutionally due latest May 2022, it would be reasonable for all political parties to share the burden by having an across the board bi-partisan buy-in for such a study. This approach capitalizes on time and seeks to hedge against any drastic action that may be taken by the EU toward the end of 2021 or early 2022. A “national” commitment to a study itself will hold important messaging for external parties. Ultimately, the main object is to be strategic so as not to be caught flat footed at a point of great urgency.
● Make taxation systems, tax revenue and space a critical and intricate part of the economic recovery discussion. Conversations to date adopts a rather abstract and disjointed approach. As an example, the ability of the government to meet its interest payments on debt is directly influenced, at some level, by what taxes are collected. Depending on the economic climate, growth or decline, the sufficiency of said taxes comes under pressure. Therefore, as we look to secure a more resilient economy, the country must come to grips with the need for greater funding, at least from time to time. COVID-19 has shown the dramatic cost increase that is possible to shore up the social sector, as an example. Refuse therefore to divorce, in a real way, linking all elements while making the issue of equity and sufficiency more than rhetoric.
● There are potential risks to the certainty of government revenue, having regard for the potential impact of tax planning, in an income tax system, especially corporation tax. The ability to use group losses as tax credit for example could result in volatility in collected revenue. The country must therefore actively start looking for potential gains from any changes, voluntary or forced. Benefiting in a fundamental way from double taxation treaties, opportunity to expand in the headquartering segment of the financial services sector, as an example, assess opportunities to gain strategic advantage over regional competitors with “settled” income tax systems. If there is ever such a change, the best approach is to squeeze our every possible advantage, which positions the country to earn more.
● Fundamentally rethink tax administration, understanding that it gets much more complex with income taxes. The general regressive nature of the current tax system has the advantage of checking itself. You cannot clear a piece of heavy-duty equipment, for example, unless VAT is paid as part of the custom process. How that equipment is treated for tax purposes though could have a fundamental bearing on how much tax is ultimately paid to the government. The tax administration infrastructure and enforcement will need to be ready to address new and unfamiliar complexities.
In this piece we sought to show how the state of the country’s economic affairs hold implication for tax systems, together with addressing the EU pronouncements which could push the country toward introducing corporation tax in some form well before it may feel comfortable doing so. The very nature of the subject matter demanded some level of speculation and consequently we share the view that eventually the matter of income tax will not just be left on the table for discussion but it will be front center as “the discussion” to be had. The country is ailing from the effects of the global financial crisis. The main task is to strategize a path to recovery and resiliency. We make the argument that given important shifts in the economy and potential lingering effects from this crisis, an unfortunate buildup of debt, and the performance of government revenue, the time may be approaching when a shift to a more progressive taxation system will serve the country better, but not without its fair share of challenges. It is an important matter. A matter demanding the attention of every business and organization, citizen and resident. It is a matter of sufficient national strategic importance that it argues for the suspension of the usual adversarial debates and beckons a sober, practical and collective discourse, for the benefit of the country. Ultimately, the whole premise of this piece may fall flat, of no value. In such a case, we would gladly acknowledge how wrong we were in our assessment. What though, if it holds true and we fail as a country to ready ourselves to at least have the conversations necessary to advance the national cause. What if?
© Hubert Edwards 2020
Hubert Edwards is the Principal of Next Level Solutions Limited. Hubert specializes in finance; internal controls; enterprise risk management; governance, risk and compliance (GRC), with over twenty years of experience in corporate governance, policy and procedures development, enterprise risk management, regulatory consulting, anti-money laundering and strategic planning.
Former Chief Business Development and Strategic Planning Officer at the Bank of Bahamas. Senior Manager Audit and Regulatory Consulting. He holds a MBA and LLB, with honours. He has lectures and trains on topics such as anti-money laundering and compliance; internal controls; corporate governance; and risk management.
Edwards is the Founder of HubertEdwardsGlobal and Success Summit. He a radio and television host and is the producer and host of the weekly radio show The Essentials! and a regular radio and television commentator on economic and financial issues.