BAHAMAS: Too Early On Corporate Tax, says Insurer.

As published on tribune242.com, Wednesday 1 September, 2021.

A major Bahamian insurer yesterday said it was too early to predict whether the industry will be impacted by the G-20 drive for a 15 percent minimum global corporate tax rate.

Patrick Ward, Bahamas First’s president and chief executive, told Tribune Business that while other Caribbean jurisdictions are raising concerns he was not alarmed because no global agreement has been reached over the details surrounding a minimum corporate tax, how it will be implemented and the accompanying rules.

Arguing that it was unwise to speculate, Mr Ward said: “I don’t necessarily know enough about the final details to make any firm assessment on that. Until we have a clearer sense on how industry is going to be impacted, and how it may filter down, I think it is premature to say it will impact us negatively in the long run.”

Other Caribbean insurers are voicing their concerns, though, particularly those in the eastern Caribbean and south-eastern Caribbean, about the impact a global minimum corporate tax may have on their reinsurance partners and the knock-on implications for them

Randy Graham, chief executive of Massy United Insurance in Barbados, told the Bermudian Royal Gazette he was watching the situation closely. He said the proposals being vetted by the G-20 countries might impact companies that provide reinsurance in the Caribbean region.

Paul Traboulay, chief operating officer and chief risk officer of Guardian Holdings Group, added: “Pressure is now being brought to bear on specific reinsurers, who are providing support to our insurers. That will create an additional challenge within a very narrow timeframe. And it is a source of worry for the future.”

However, Mr Ward added: “I think the other thing to consider is that there is a minimum size requirement for companies to have a certain revenue in order to fall into that tax category of companies that are going to be caught up in this.

“I don’t really understand how that is going to play out yet, but I know The Bahamas government has indicated that they are in favour of this development. But then again, until the rules are fleshed out in detail, we will just have to wait and see.

“We also have to see what minimum-sized companies they are looking for. This is not intended to apply to ‘mom and pop’ stores or companies below a certain size in terms of revenue. We’re just not sure what that’s going to be.”

Mr Ward said all Bahamas First’s reinsurers pay tax other countries, so it should not be difficult for them to meet the 15 percent minimum requirement. “It will depend on the roll out of the corporate tax,” he added.

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