Business
Push in Jamaica for urgent discussion of new US tax law – FATCA
Jarrett of JNBS, which provides financial services such as money transfers and mortgages to thousands of persons in the diaspora, said FATCA could create some serious challenges for financial institutions way beyond costs.
“It could actually have significant implications for savings flows to institutions in Jamaica, as well as remittance flows to Jamaica, as some Jamaicans and others may shy away from the potential implications of the reporting,” he said.
Six million self-identified members of the Caribbean diaspora were living in America in 2009, according to official US data. Measured statistics show that at least one million Jamaicans live in New York state and another 750,000 in Fort Lauderdale alone, said Jarrett.
Members of the diaspora contribute significantly to the Jamaican economy in the form of remittances — inflows amounted to just under US$1.7 billion for the first 10 months (April to January) of the 2011-12 fiscal year, according to recent Government statistics — and a considerable amount of funds they remit are channeled into the formal sector.
FATCA could have a significant impact on the economy in the form of flight of capital to countries where there are no requirements for compliance, or in a proliferation of illegal and unregistered financial providers, argued Jarrett.
“Depending on how persons perceive this will impact their own lives, we could see a flight of capital or an increased tendency for underground activities, pass your funds to a ‘John Brown’ who will shelter it here in Jamaica,” he said.
While local financial institutions have an option whether or not to sign the FATCA, non-compliance would result in serious consequences that could cripple their businesses.
