BAHAMAS: ‘Pre-Empt’ On Corporate Income Taxes, says IMF

• The Bahamas has been urged by the International Monetary Fund (IMF) to “pre-empt” global tax pressures by imposing a corporate income tax designed to suit its own purposes. 
• The Fund, in a report that has generated much political controversy, asserted that “the balance firmly tilts” in favour of The Bahamas getting out ahead of the G-20 and Organisation for Economic Co-Operation and Development (OECD) push for a 15% minimum global corporate tax rate. 
• Suggesting that The Bahamas “impose that same level of taxation” for itself, the IMF said that while this would impact the domestic economy, it would also ensure all corporate income tax revenues go to the Government there rather than their counterparts abroad. 
• The Fund warned that delaying or “abstaining”, from a corporate income tax could “pose reputational risks that can jeopardise the economy”. While Tribune Business has seen documents that back this finding, well-placed sources aware of the IMF report yesterday revealed that it also recommended imposing a personal income tax on so-called “high earners”. 
• This was urged on the basis that Bahamian companies could seek to avoid/evade a corporate income tax by switching their profits to salaries paid to shareholders, senior executives and upper management, thus requiring that both company and personal income be taxed.

(Source: International Finance Corporation)