BRIDGETOWN, Barbados, Thursday March 1, 2018 – Corporations, businesses and governments in the Caribbean will have to effectively strengthen their tax systems to align with the requirements set out by the Organisation of Economic Cooperation and Development (OECD)’s 15 Action Plans that fall under the Base Erosion and Profit Shifting (BEPS) project, while balancing to generate and promote economic growth.
However, according to PwC’s Tax and Legal Services Leader (TLS) for the Eastern Caribbean (Barbados) and the Caribbean region, David Prestwich, “it won’t be so easy” as there may be a few challenges ahead for developing countries like the Caribbean.
“While this is an unprecedented system on tax to be more transparent and balanced, there are a few concerns underpinning the current global tax system. In principle, this global system is meant to align key principles of taxation for multinationals, which every country tax system can adhere to, but for small island states like Barbados and the other Caribbean nations, the application of the BEPS project may be difficult to uniform from jurisdiction to jurisdiction,” explained Prestwich, who was the guest speaker at yesterday’s Barbados Chamber of Commerce and Industry luncheon.
He said that in the context of challenging fiscal conditions, more focus most now be on tax and the resulting changes and uncertainty that will affect clients, companies and governments – domestically, regionally and internationally.
“The problem,” he noted, “is we haven’t really got time to put the world on pause while the articles of BEPS are aligned and implemented – plus governments have other things going on. So we may feel the effects more than others here in the Caribbean over the next few years as governments have to play catch up. Most are only just starting to grapple with what this means by way of changes to local legislation. And I can tell you that most international tax experts are struggling to keep pace with the scale of legislative change we are looking at.”
He did point out that PwC has made it a priority to help clients deal with this increased uncertainty by helping them look forward and plan accordingly.
“Companies, clients and governments will face many issues if they haven’t already because of these and other changes; from dealing with costs to coping with the global reach of implementation, but we at PwC have developed an approach that can help our clients face these changes in a holistic and streamlined way. We are in a position to provide strong guidance and market leading support for our clients to navigate through this uncertainty,” said Prestwich.