Bridgetown, BARBADOS, February 26, 2009 – The Government of Barbados has pledged that it “will not sit idly by” and allow any chaos to unfold within that country’s critical international business sector.
This assurance was delivered to members of the Barbados International Business Association (BIBA) by George Hutson, Minister of International Business and International Transport, at the organisation’s monthly luncheon on Tuesday.
He said that not only would the sector be covered under government’s recently crafted fiscal stimulus ‘The Barbados Short and Medium Term Action Plan’, but his own ministry had also put in train its own ‘Short and Medium Term Action Plan for the International Business Sector 2009 – 2011’. The plan aims to tackle the perceived impact the economic downturn would have on the sector while mitigating potential loss and creating avenues to exploit any possible market opportunities over the next two years.
His comments came in the wake of the high-profile collapse of Antigua’s most prominent offshore company – the Stanford Group –, a decline in the number of offshore businesses registering in Barbados in 2008, and a decrease in corporate tax received, which the Central Bank of Barbados said is due to declining profitability in the sector.
Barbados’ international business sector accounts for roughly 60 per cent of corporate tax received by the government, and Hutson noted that estimates put its contribution to the Barbadian economy at 20 per cent of its gross domestic product when spin-offs such as real estate transactions and high-end tourism spend was accounted for.
He also reported that Barbados currently has 10 bilateral investment treaties (BITs) in place, plus 16 double taxation agreements (DTAs), and added that the government was pushing to ratify DTAs with Ghana and Luxembourg and a BIT with the Belgium-Luxembourg Economic Union this year. At the same time, it will push forward with negotiations of DTAs with Italy, Spain and Iceland.
Hutson added that his ministry would also be turning to the secretariat of the Organisation for Economic Cooperation and Development (OEDC) to aggressively pursue opportunities to conclude and amend tax treaties with member states in order to enhance Barbados’ network of competitive tax treaties.
The Minister also promised to amend legislation later this year to implement a new system for the renewal of licenses for international business entities and international societies with restricted liability; review the holding company and shipping corporation legislations; implement revised license application forms to better capture statistical data on the sector; and improve the administrative and operational systems of his ministry to ensure the highest international standards were met.