A double taxation agreement with Brazil is a vital and urgent necessity.
That Barbados-Brazil tax connection is needed, says John Beale, Barbados’ Ambassador to Washington, in order to give the island’s offshore financial services sector a shot in the arm as it comes under increasing pressure from many of its Caribbean neighbours following Canada’s decision to give The Bahamas, Bermuda and other countries the same tax concession Barbados had exclusively enjoyed for years.
“The double-taxation agreement with Brazil is something we should really make an effort to negotiate because it would bring a lot more business to us in the international financial sector,” was the way Beale, ambassador to the Organization of American States and the United States, put it to BARBADOS BUSINESS AUTHORITY.
“We should continue to improve on the tourism side with Brazil because it would get more people coming to the island. That would create more business interest and boost trade between the two countries.
“To get more trade going we also need better shipping routes that would address issues of costs and turnaround time,” added Beale, a former banker in Bridgetown.
“Right now, if we ship goods to Brazil or that country exports to us, they must go through Miami. But better shipping links would open up new avenues for two-way trade. The current airline link is good but we must try to do [more] on the shipping side and in the international financial services side as well.”
The ambassador who has lived in Brazil said that the South American Portuguese-speaking giant, now on the list of the world’s Top 10 leading economies, should be viewed as an important partner, much like Mexico.
“We have a double taxation treaty with Mexico and when I was in Barbados recently for the CARICOM-Mexico summit, I was informed that our agreement with Mexico is showing some results,” he said.
“I don’t have all of the details but from what I was told, we are seeing business coming out of Mexico as a result of the agreement. That’s a positive sign and we need to move to get a similar arrangement going with Brazil.”
Beale’s plea has come at a time when Barbados is said to be losing some of its offshore financial business with Canada in the wake of Ottawa’s decision to give Bermuda and The Bahamas tax concessions that Barbados alone had enjoyed for years.
Already, said a source who requested anonymity, at least two offshore firms have left Barbados and more are considering packing their financial bags.
The Stuart administration is under increasing pressure from executives in the sector who complained that it was too slow in responding to the threat posed by Canada’s action.
“The Government knew long ago that Canada was extending the concessions to Barbados’ neighbours but it didn’t move aggressively to improve conditions,” said an executive.
“The Government is like molasses going up a hill when it comes to making decisions about the offshore sector. It must move faster.
“The sector is vital to our economic success and we can’t sit idly by and allow businesses to leave.”
