The Bahamas must choose what position it will take on the Foreign Accountant Tax Compliance Act (FATCA) very soon so that negotiations can progress, according to a top accountant. Lawrence Lewis, a partner at Deloitte & Touche, who has responsibility for FATCA in The Bahamas, noted to Guardian Business that the country must confirm its position within the next month or two so that the government can negotiate it. "The government's machinery needs to get going on negotiating the position that our jurisdiction plans to take.
At the same time, organizations need to understand what kind of position we're looking at. As they're executing on their plans, they can make the necessary adjustments to fit into what the government has planned," he shared. Earlier this week, the Ministry of Financial Services, in conjunction with the Central Bank, the Securities Commission and the Compliance Commission, issued a survey to assess the industry's readiness for FATCA. The survey examines the preparations already undertaken and planned undertakings by those entities deemed as "foreign financial institutions" (FFIs) under FATCA.
It also seeks to provide the government with an estimate of associated costs for resources that will be incurred to become FATCA compliant by Bahamian financial sector firms. The survey's release is part of the government's effort to prepare The Bahamas for the 2014 implementation of FATCA. Lewis said he is happy that the government is moving forward and reaching out for industry stakeholders. "That's definitely a positive. We need to go through this process very quickly," he said.
Financial Services Minister Ryan Pinder noted that FATCA preparations are well advanced in The Bahamas. A minister's advisory committee consisting of private sectors, regulators and public sector officials, including the Ministry of Finance and the Attorney General's office, has been appointed. "We are closely reviewing both Inter-Governmental Agreement (IGA) Models and also examining the agreements which have recently been finalized to determine the best way forward for The Bahamas.
I continue to see the sovereignty of The Bahamas as an asset, as the Cabinet of The Bahamas, and ultimately the Prime Minister decide the best route for The Bahamas rather than external pressures. The Bahamas will be ready," according to Pinder. FATCA was signed into U.S. law in 2010 through the US Hiring Incentives to Restore Employment Act. FATCA seeks to identify U.S. taxpayers having accounts at foreign financial institutions (FFIs) and attempts to enforce the reporting of those accounts through withholding. It is also projected to raise $7.6 billion in tax revenue over a 10-year period.
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