by Linda Straker
- Clear Harbourccall centre employs hundreds of workers many of whom are women
- The International Companies (Repeal) (Amendment) Act 2021 is scheduled to receive approval on Friday, 21 May 2021
- Registration under The Companies Act will result in these companies paying local corporate taxes
Hundreds of jobs that could have disappeared by companies that were set to be affected by the repealing of the International Business Company (IBC) legislation will be allowed to continue operating without winding-up operations as mandated by the International Companies (Repeal) Act, 2018.
“Notwithstanding Section 2, in respect of an International Company carrying on business under the International Companies Act in good standing as at 31st August, 2021, as of 1st September, 2021, the company shall be deemed as continuing to carry on business under and in accordance with the Companies Act.” The International Companies (Repeal) (Amendment) Act 2021 is scheduled to receive approval from members of the House of Representatives when it meets on Friday, 21 May 2021.
The companies according to the amendment shall continue to provide services in accordance with the Companies Act; and be subject to all liabilities and penalties under the Companies Act for non-compliance.
Registration under The Companies Act will result in these companies having to pay local corporate taxes unless there is a package of concession that prevents the Inland Revenue Department in the Ministry of Finance from demanding the payment. The records of these companies with directors and bylaws will now become public documents.
In the mid-1990s when Grenada embarked on making offshore banking and international business registration one of the sectors to grow and develop the economy, 4 pieces of legislation were approved to facilitate the financial business sector. The International Companies legislation, the International Insurance legislation, the International Trusts legislation, and the Offshore banking legislation which were integral to the sector, will be repealed as of December 2021.
The European Union in 2017 described these legislations as “harmful tax practices” and Grenada was among 90 countries screened against tax transparency, harmful tax practices and based erosion profit shifting.
“It has become necessary to re-examine, to amend or even abolish existing tax measures, legislation or regimes that constitute harmful tax competition and also to reframe countries from introducing new measures that constitute harmful tax competition,” said Legal Affairs Minister Kindra Maturine-Stewart when she presented the 4 pieces of legislation in the House for members’ approval in December 2018.
However, shortly after repealing the legislation, it was realised that hundreds of workers mainly working at call centres will become unemployed by repealing the laws. Gregory Bowen, Leader of Government Business in the House, had then given the assurance that these workers will be protected. Among the companies that will be affected is Clear Harbour, a call centre employing hundreds of workers many of whom are women.
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