Barbados and other small states are being asked to shoulder an outsized share of the pressure created by shifting global tax standards, Opposition Senator Andre Worrell warned, as lawmakers moved to final passage of new economic substance rules amid mounting compliance costs.
Senator Worrell was speaking on Wednesday during debate on the repeal of the Companies (Economic Substance) Act and the consolidation of substance rules under the Income Tax Act. The government has said the move streamlines filings and aligns Barbados with the global minimum tax regime.
But the wider international environment that Barbados must now operate in is “stacked against small countries,” he said, as he urged policymakers and international partners to acknowledge the strain placed on limited regulatory and financial systems.
“It is not fair that small jurisdictions like ours are expected to compete as if we had the infrastructure and resources of much larger economies,” he told the Senate. “We are expected to bear the brunt of regulations and compliance costs while many of these larger countries refuse to impose fair taxes on their own wealthy individuals and corporations.”
He argued that Barbados has spent years adjusting to changes driven by major economies seeking to pull back revenue from multinational firms headquartered within their borders. He said that while the island has repeatedly strengthened oversight and updated laws, the cost of doing so is significant for a country with a $14bn economy.
“We are asked to contribute less than one per cent, yet the process to get there is arduous and complex,” he said. “We jump through all of these hoops because we must generate revenue, create jobs and support our economy,” he added, noting that “the demands are immense for a country of our size.”
Senator Worrell reminded lawmakers that international business has long been an important pillar of the economy. Quoting earlier industry data, he noted that in 2007 the industry generated about $492m in revenue from roughly 3 334 companies, supporting employment in law, accounting, administration and related services.
“It gave young professionals the chance to work with large international firms and manage multi-million-dollar portfolios they would never see in local companies,” he said, adding that spin-off benefits also flowed into real estate and hospitality.
He further warned that as global standards continue to shift, small states must not be left to carry the compliance load alone.
“We need support, including concessionary loans and recognition of the vulnerabilities we face,” he said. “We cannot be expected to carry all these burdens alone.”
Senator Worrell also criticised what he described as the double standard applied to Caribbean jurisdictions by some rich nations, arguing that the region is often labelled and scrutinised despite its limited global footprint.
“They forget they built their wealth on sugar, tobacco and cotton grown on our lands,” he said. “We want our share and the opportunity to earn and sustain our people.”
He stressed that Barbados remains committed to being compliant but insisted that international business must continue to be protected because it “remains crucial for Barbados” and still offers opportunities to young professionals.
“We must do everything possible to keep it thriving,” he said. “We are not asking for much — just a fair opportunity to grow and sustain our economy.” (SM)
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