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IMF Praises Bahamas On Fiscal, Regulatory Policies

by Jason Gorringe, Lowtax.net, London
29 March, 2016

The Bahamas should retain a simple broad-based value-added tax regime, the International Monetary Fund has said, commending the territory for successfully implementing the tax.

The comments were from an IMF mission that was in the Bahamas to conduct discussions towards the publication of the IMF's 2016 Article IV consultation with the territory.

The IMF team, led by Jarkko Turunen, also welcomed recent progress in improving revenue administration. The IMF said: "Further steps to ensure continued success in VAT implementation include strengthening administration and establishing a compliance audit program. Efforts should focus on moving further towards a fully-fledged central revenue agency, with a well-defined institutional and organizational structure, and continued modernization of customs and property tax administration. The authorities should also review the efficiency of tax exemptions and concessions, including to the tourism sector, and consider simplifying domestic taxes that are not business-friendly."

The IMF observed that the Bahamas domestic banking system as a whole is well capitalized, liquid, and profitable. It welcomed recent progress, including on the implementation of the Basel capital adequacy standards, and urged authorities to continue enhancing risk-based supervision and the framework for crisis management.

It noted that while overseas banks are shutting down their Caribbean operations, the health of the Bahamas financial center has remained robust.

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