Curtis Dickinson, the Minister of Finance for Bermuda, has responded to the announcement of a global minimum corporate tax rate being agreed upon by G7 leaders, highlighting the importance of cross-border trade to the Bermuda economy.
An agreement was reached last week which backed the creation of a global minimum corporate tax rate of at least 15%, an agreement that could form the basis of a worldwide deal.
Dickinson said: “Bermuda has had a history of supporting quality business, while adhering to fiscally responsible policies through a balanced long-term growth agenda.
“Given the importance of cross-border trade to the Bermuda economy, Bermuda authorities have always been committed to ongoing compliance with international standards for financial regulation, transparency, and international cooperation.”
He expressed how the Bermudian government has been subject to independent, international scrutiny by various global standard-setting bodies, which confirms this position.
“We have been actively involved in international discussions on regulatory and tax matters and have continued to liaise with our key trading partners, including the UK, the USA and the EU, on financial and other relevant matters,” he noted.
“We are fully engaged with the current multilateral work of the OECD Inclusive Framework Committee on Base Erosion and Profit Shifting (BEPS) to address international concerns around base erosion and profit shifting.”
He expressed his support towards the G7 Finance Ministers, and the overall objectives outlined in the comprehensive document.
“We laud efforts to effectively address climate change, combat financial crime, create greater financial stability and help vulnerable economies.
Dickinson also highlighted that with regard to the proposals presented on tax, it is critical that any agreed framework to establish a global minimum tax, must respect a country’s right to sovereignty in relation to its tax system, adding that any outcome that impacts this right is outside the original agreed aims of the OECD BEPS initiative.
He concluded by stating that Bermuda’s consumption-based tax regime has been in place for almost two centuries and is a system shaped for efficiency in a very small and un-diversified economy.
Its existing system yields a ratio of total government receipts to GDP of approximately 16% on average, which he deems appropriate for an economy such as Bermuda’s.
“As these matters are progressed, conclusions reached must incorporate principles of fairness and right to sovereignty in this important area. There should also be appropriate recognition of the considerable work done, by countries such as Bermuda, to be effective partners in promoting and implementing robust standards for strong and robust regulation, transparency and international cooperation.”