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Time against T&T on FATCA

Published: 
Friday, January 6, 2017
FLASHBACK December 10th 2016 . Finance Minister Colm Imbert speaks during the FACTA debate in parliament after members of the opposition walked out

The clock is ticking. The breathing room granted by the United States Government for T&T to pass the Foreign Account Taxpayer Compliance Act (FATCA) legislation is quickly running out and there are now only weeks left before the February 2017 deadline given for this country to become fully complaint and avoid significant repercussions.

Today, in the House of Representatives, it will be up to this country’s 42 elected representatives to do the right thing when deliberations resume in the committee stage of this vital piece of legislation. Hopefully, the measures will be considered objectively and in the interest of T&T this time around, avoiding the drama and finger-pointing that has been an unfortunate feature of political deliberations on the Bill thus far.

The FATCA Bill is the one issue that this country’s legislators would have done well not to politicise. Still, it isn’t too late for the two sides to wipe the slate clean and demonstrate true bipartisanship, doing all that is necessary today to safeguard their constituents and the economy from the severe consequences of FATCA non-compliance.

On the last occasion that the legislation was considered by Parliament, Finance Minister Colm Imbert tabled a series of amendments which will be considered when the committee stage resumes. However, the signals from the opposition United National Congress (UNC) is that they are unflinching in their resolve not to vote for the Bill unless it is first considered by a Joint Select Committee of Parliament.

Given the history of this legislation and that fact that its drafting and development has stretched over two political administrations, it should have been easy for the ruling People’s National Movement (PNM) and the UNC to arrive at a consensus on FATCA.

After all, while the Inter-Governmental Agreement (IGA) was developed during the People’s Partnership administration, with the UNC as the main political party in that government, it finally went into force last year under the PNM. Why, then, has it become so difficult to move through the next stage of FATCA compliance?

Time is not on T&T’s side where this matter is concerned. This country has been facing this matter for almost seven years, ever since the US Congress enacted legislation in 2010 that extends the reach of that country’s tax law to T&T and other parts of the world.

For almost that length of time, there have been discussions, often very passionate, on which some see as strict and expensive obligations being imposed by the US on governments, companies and institutions.

The reality is, however, that FATCA may be just the beginning. Tax compliance is rapidly become a global priority and the US is not the only jurisdiction looking for tax evaders.

At the core of the FATCA agenda is an effort to deal once and for all with the problem of tax evasion. On a much larger scale, the Organization of Economic Co-operation and Development (OECD) is working on introduction of the Common Reporting Standard (CRS) to facilitate the automatic exchange of tax information between non-US countries.

Therefore, this is not a matter of giving in to the imperialistic ambitions of any single country.

While Members of Parliament here persist with their unnecessary sparring over FATCA, pushing the country ever closer to financial consequences no one wants to face, the US Treasury has this month started updating their IGA list to re-evaluate the progress of all jurisdictions that have failed to bring them into force.

At present, T&T is in a very difficult place with the FATCA impasse, along with the looming strike at state-owned Petrotrin threatening to further destabilise an economy that has already suffered significant decline.

Today, in Parliament, it will be up to the MPs to put the country’s interests first.

Hopefully, the measures will be considered objectively and in the interest of T&T this time around, avoiding the drama and finger-pointing that has been an unfortunate feature of political deliberations on the Bill thus far.