Barbados Economic Society (BES) president Jeremy Stephen has described the Foreign Account Tax Compliant Act (FATCA) as a blessing. The main objective of FATCA is to ensure that the United States’ Internal Revenue Service (IRS) can identify and collect taxes from American taxpayers abroad.
It will apply to commercial banks and financial institutions with American clients within a certain threshold. Under the agreement, financial institutions will have to report all of their United States clients and assets. Failure to do so will result in a penalty of a 30 per cent withholding tax.
Responding to questions during a recent accountants’ seminar at the Hilton Barbados Resort, Stephen said it was important that Barbados give greater attention to the international business sector in order to grow the economy. He said there should be no concern about international moves that called for transparency and compliance with
In fact, he said, the introduction of FATCA could result in Barbados being able to get more business from the United States.
“FATCA is a blessing in disguise. It is a blessing in disguise especially when it comes to our being competitive as an offshore market, because we are already compliant,” the BES president said.
He added, however, that the Government should focus on facilitation and efficiency “as extra incentives for people to come and set up businesses here”.
“We are in a prime position in the international business arena, especially if we target Americans, to do good business. I don’t care if the American government peeps into [financial institutions’] accounts here. I don’t care, and I think any country shouldn’t care.
“The problem is when sovereignty is called into question, but as it comes to revenue making opportunities, why care? The Swiss’re sending away people. Let’s grab them,”
As far back as 2012, some officials from across the region, including Barbados, had expressed concerns about FATCA requirements. Since then Barbados has been taking the necessary steps to ensure the country meets the deadline.