Taking the lead on economic substance
The Senate recently ratified the Economic Substance Amendment Act of 2019 after passing unanimously in the House of Assembly.
Within our democracy, it is advantageous that legislation being considered that impacts the economic health of our country be studiously contemplated, rigorously debated and rolled out as a well-crafted and thought-out document, which not only solves problems for today, but positions us for the foreseeable future.
It is praiseworthy that there was one voice emanating from our legislature in both Houses, which was “Let’s fix the gap created from the lack of foresight in the original Economic Substance Act 2018 and align ourselves with our fellow Crown and independent territories”.
What this process demonstrated to me is that Bermuda has relinquished its time-honoured position as a leader in the offshore finance/insurance capital of the world and has been reduced to a second-tier domicile whose lofty mark of achievement is to amend an Act that merely levels the playing field.
In sporting vernacular, that’s like playing for a draw when an outright victory is in one’s grasp.
Leadership is simply the ability to influence. Can one find Bermuda taking an influential role in this process when we rolled out a Bill in December 2018 void of a tax residency clause in its original drafting when direct competitors such as Cayman Islands, British Virgin Islands and the Channel islands had it enshrined in their legislation at the same time?
There is no shame in peeking over the shoulders of competing jurisdictions’ legislation to ensure that we have included all the ingredients in our laws necessary to maintain alignment with them and satisfy the regulations set out by the European Union.
This government has taken on the practice of last-minute, poorly planned-out, lack of consultative drafting of legislation that spotlights its “measure once, cut twice approach” to crafting legislation that delivers a devastating blow to its claims of good governance being the centrepiece of its administrative efforts as opposed to political expediency.
This amendment to the Economic Substance Act 2018 is evidence of its approach, but sadly is not the only one.
One needs to look no farther than the Government’s attempt to amend the Municipalities Act, which failed, and its hurried passing of the Health Insurance Amendment Act 2019, which produced unintended consequences such as increased premiums and a health industry full of uncertainty.
As a jurisdiction we can re-establish our leadership position by drafting legislation and implementing policies — immigration comes to mind — that does not stop at levelling the playing field, but rather aims to gain a competitive advantage.
We can do it, Bermuda.
• Marcus Jones is a One Bermuda Alliance senator