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by pltm
(PLTM) - The next government of the British Virgin Islands needs to stand up against the larger nations that are playing a role in the over-regulation of the financial sector, which is leading to the detriment of local businesses.
Those were the sentiments of legislators as they once again rushed to the House of Assembly (HoA) last night, January 22, to pass additional amendments to the ‘Economic Substance Companies and Limited Partnerships’ Act to prevent blacklisting by the European Union (EU).
Back in December, the HoA passed the ‘Economic Substance Companies and Limited Partnerships’ Act following a promise to do so by Premier and Minister of Finance, the Honourable, Dr. D. Orlando Smith, so that fears of the EU as it relates to tax transparency, fair taxation, base erosion and profit shifting (BEPS) in the Territory would be addressed.
However, the Amendment had to be passed weeks later due to a shifting goal-post by the the EU, and as a result, some legislators are urging that this ‘bulling’ be addressed.
Countries that are lacking in legislation or found to be culpable of such adverse activities are blacklisted, while some are placed on the “greylist,” which the Territory is now on.
District Three Representative, Hon. Julian Fraser reminded that the only reason all legislators supported the bill was because it was “in the best interest of our territory and our probably number one pillar.”
He explained that as a result of these changes in legislation, local businesses are suffering. “It’s not the substance itself that bothers me. It’s the reporting of the substance. The conditions that are being placed on companies, and I’m speaking specifically of local companies, locally owned businesses, is becoming more and more onerous and this is something I have been talking about for a while,” he stated.
“Our local companies who are far removed from “financial services”…These high end transactions that are taking place in these companies that we register in this territory…companies that are sometimes registered for maybe one transaction only and then dissolve, companies that are involved in high finances."
He added, "but here I am talking about the guy who owns a shoe store and a gas station but has been urged to incorporate his business for liability purposes."
“However, because we have one category of companies, they’re subjected to the same rules and regulations and all these onerous regulations that are being placed on them,” Hon. Fraser stated.
He urged that these recently passed legislation that affect local businesses be revisited by the next government that comes into office.
Meanwhile, District One Representative, Hon. Andrew Fahie said that the BVI needs to stand up against what he views ‘Political bullying.’
“This is clearly political bullying,” he stressed as he claimed that some of these large nations do not even meet the standards they try to force on the BVI.
”I am concerned…that we are not overregulating the industry to the detriment of our people,” he stated.
A portion of the financial sector cannot be safe, Hon. Fahie shared, adding, “because the bigger countries obviously want to get their hands on the monies to bring them back home, because in their mind, they feel something is going wrong and illegal. Which, no matter how much we do marketing to ensure otherwise, they still will continue to have that mindset which is a travesty.”
He continue to stress on this, stating, “We have done all that we can to make sure that we safeguard from being blacklisted but the challenge is even with this we have no guarantee that EU still won’t blacklist us.”
This position was shared by Opposition Member, Hon. Archibald Christian, who told the House of Assembly, “Election is just around the corner, the next Government that comes into this House is really gonna have to take the bull by the horn and seriously send a message saying that you cannot continue to bully these little territories because you think you have all the ammunition.”
