Financial sector government taxes and fees up 15% in 2021 – Eye Witness News
NASSAU, BAHAMAS— Total taxes and fees collected by the government from the financial sector last year rose 15% to just under $200 million, according to the Central Bank.
The bank noted that the total number of licensed banks and trust companies in the Bahamas had further decreased by 3 to 214.
The findings were included in the bank’s analysis of the financial sector’s gross economic contribution in 2021.
The bank said: “An analysis of financial sector performance showed that total taxes and fees collected by the government increased by 15.1% to $189.2 million in 2021. Underlying this development, transaction taxes on domestic intermediation activities increased by 19.2% to $112.0 million, largely attributable to growth in banking transaction taxes (30.2%) and premium taxes insurance (5%).
“In addition, licensing and registration fees increased 9.6% to $77.2 million, supported by a 25.7% increase in collections from investment funds (11.2% of the total) and 10.6% from international trading companies (17.4% of the total).In addition, claims from banks and trust companies (68.5% of the total) increased by 4.6% , while recoveries from financial and corporate service providers jumped to $1.9 million from $0.5 million in 2021.”
The financial services sector accounts for around 10-15% of the country’s gross domestic product.
The Central Bank noted that data from the Bahamas Financial Services Sector Survey 2021 suggests the sector “continues to face headwinds, with global regulatory standards and efficiency pressures impacting the market. balance sheet and the consolidation of operations”.
“Specifically, the international industry continues to adapt to enhanced tax cooperation, anti-money laundering (AML), counter-terrorist financing (CFT) and counter-proliferation standards. Additionally, amid declining employment levels, the international sector has turned to relocating customers and operations to emerging lucrative opportunities outside of North America and Europe.
“In 2021, the estimated size of the balance sheet of financial sector operations declined, as evidenced by a decline in assets held within the banking sector. In particular, on-balance sheet assets contracted by approximately $23 billion (13 .3%) to $149.8 billion, as reductions in international bank assets offset gains in domestic bank assets,” the Central Bank noted.
According to the regulator, the total number of banks and trust companies licensed in the Bahamas decreased by 3 to 214 in 2021, following a reduction of 4 in 2020.
“Public banks and trust companies have been reduced from 4 to 80, while restricted, inactive and nominated persons have increased from 1 to 134,” it read.
“Public institutions providing domestic and international service arrangement included 48 Bahamian incorporated entities and 12 Euro-currency branches of foreign banks operating in the Bahamas.
“In addition, there were 20 licensed dealers and agents, which included 11 licensed agents (resident trust companies) and 9 licensed dealers (commercial banks) – including 7 clearing banks.”