CESRA turns up the heat.
The boiling frog dilemma anecdote describing a frog slowly being boiled alive is an apt description of what is happening here in The Bahamas over the past couple decades.
The political class keeps ratcheting up regulations and taxes without much fuss from the frogs (business community and the taxpayer), as if the economy is their personal stove and pot of water, and we continue sliding toward darker days.
The governing party – the banner does not matter – keeps assuring us, if they just add a few more regulations that effectively tie the hands of entrepreneurs and business, and tax everyone a few more dollars, all will be well. Yet the effects are obvious. Businesses fail, investors go to Turks and Caicos or elsewhere and Bahamians hold back on investing and many families now encourage their children to stay abroad after school so they can find work.
The public policies being implemented like VAT and the proposed Nationalised Health Insurance Scheme, essentially socialism in disguise, have the same effect elsewhere. As the welfare state grows, it gets more clients, growing government taxes, deficits and debt instead of the economy.
Now in 2021 add the Commercial Entities (Substance Requirements) Act (“CESRA”) to the list.
Here's what Delany Partners Commercial Lawyers posted to their web site January 6 2021:
Commercial Entities (Substance Requirements) Act (“CESRA”). URGENT: Filing Deadline Extended
THE DEADLINE under the CESRA for filing to be made by Bahamian entities has been extended to 31 January 2021. The original deadline was 31 December 2020.
The Public Notice issued by the Ministry of Finance is accessible here.
The CESRA legislation is intended to ensure that commercial entities claiming to be tax resident in The Bahamas have a real nexus to the jurisdiction. It applies to all entities in The Bahamas registered, incorporated or continued under the following legislation:
Companies Act;
International Business Companies Act;
Partnership Act;
Partnership Limited Liability Act; and
Exempted Limited Partnership Act.
(collectively “commercial entities”).Commercial entities may submit their economic substance report by registering for an Entity Identification Number and completing the relevant economic substance Form via the Economic Substance Reporting Portal: https://substancereporting.revenue.gov.bs/.
What happens if you do not complete your CESRA filing?
Commercial entities that fail to comply with the CESRA reporting requirements commit an offence and will be subject to an administrative penalty for non-compliance of $150,000 or struck off from the applicable register.
More here...
Now back to the subject at hand.
Nordic countries, for example, are said to utilize a gentler form of socialism that works, yet “Denmark, as are the other Nordic countries, quite free markets, apart from their welfare state transfers and high government consumption,” according to the Center for Political Studies (CEPOS).
Af Otto Brøns-Petersen, CEPOS director for analysis suggests that:
“In many respects, Denmark could serve as a model for the World (just like most other countries). But if you fail to learn the right lessons, it could be dangerous to try to imitate our model. Especially the idea that you can become rich by redistributing wealth or that there is a gentler way to socialism than the one experienced by typical socialist countries in general could get you into trouble.”
Read his entire article here…
To paraphrase The Atlas Network, Denmark is a good example of the prosperity free market policies can bring. The problem, as The Bahamas is now experiencing, is how prosperity is maintained and not squandered by the government.
Government is no mastermind of the economy, but regretfully bad public policies can and do stifle innovation and economic growth. It’s time to turn the heat down on the stove so the water in the pot can cool and the frogs set about helping the economy grow.
Update (added Now in 2021 add the Commercial Entities (Substance Requirements) Act (“CESRA”) to the list.) for piece first published by the Nassau Institute 2015-12-30
See Rick Lowe’s Nassau Institute archive here…
See Rick Lowe’s WeblogBahamas.com archive here…
