Mr Live Wire has heard the questions: “What the arse is FATCA?” “Dem politicians wouldn’t be playing the fool if this so serious, right?” “PNM just trying to scare we again, nah?” “That have something to do with Marlene coming back?”
Well, despite the legitimate interest in pompous Pussyfoot’s petty cash purchases and Dr Keithos’ weird Gumbs challenge—aren’t you old enough to have finished teething?—it turns out that the FATCA deadline of 30 September will probably be the most important thing to happen this week.
Quite unhelpfully, Finance Minister Colm Imbert booked his Budget speech on the same day. Presumably, Imbert did not foresee that the UNC would feign such a startling ignorance of what is at stake here.
Wait, isn’t Colm becoming an optimist one of the signs of the apocalypse? Ahmm.
Anyway, let’s take a layman’s look at FATCA.
First of all, FATCA stands for Foreign Account Tax Compliance Act and is interested in the assets of US nationals not the business of Trinidad and Tobago citizens. Uh, that includes “accidental Americans” too, as in locals who were born in the US as well as their offspring.
These good folks—and Winston “Gypsy” Peters—will now be treated to a more rigorous examination of their assets than Americans who actually live in the States. And FATCA obliges non-US banks to do that dirty work for them or risk being frozen out of the US financial system. In essence, every bank in the world will become non-paid informants of the IRS.
The cost of America’s witch hunt for tax evaders was estimated to be around eight times the value of income the IRS expects to recoup. So, to make this exercise financially viable, the IRS will let the banks pick up the tab for their investigation of US citizens who are using their services.
And bear in mind that, whereas most nations exempt their expats from paying taxes once they can prove they are being taxed abroad, the IRS insists that all citizens must pay up regardless. The only other nation in the world that does that is Eritrea.
Since FATCA was launched in 2010, the number of Americans renouncing their citizenships has risen each year. In 2015, the figure went up by 20 percent from the previous year, which was also a record.
Former London Mayor Boris Johnson was among thousands who binned their American passports after the IRS demanded taxes on an apartment he sold in Britain.
Not one to miss a trick, the IRS raised the fee for renunciation to US$2,350, which is an increase of about 400 percent. Let’s just say the US taxman doesn’t sound like the kinda fellah to forget about Jack Warner’s not-too-unsubstantial debt to the stars and stripes.
So, should Trinidad and Tobago object to accepting such a costly and invasive excursion into its own banking system by the Yanks? Of course!
We should also refuse to fork out TT$300 for a plate of pasta at those stoosh restaurants in west Trinidad.
But if you are there already and want to get fed, you will pay. And if you want access to the US banking system, you will do the same.
Otherwise, the IRS will start by withholding 30 percent of financial transfers—even Moneygram and Western Union—to locals, whether they are American or not, until they can prove they are not involved in tax evasion.
Flight attendants won’t be smuggling illicit drugs across international borders anymore. They would be sneaking in money from Kwesi’s aunty for his graduation suit!
Can Colm get Trinidad and Tobago another extension?
Well, Russia President Vladimir Putin also railed against FATCA, which he described as an attack on Russian sovereignty. Then, 24 hours before the US deadline, Putin caved and signed on 30 June 2014.
Think Sarcastic Smurf can drive a harder bargain than a man who rides horses bareback in Siberia and invades neighbouring countries in his spare time? FATCA chance! Just sign the damn thing and done, Kamla!
Statement from US Ambassador John L Estrada on 27 September 2016:
I am in Washington DC for meetings with the Department of State, Congress, and the White House. I am bringing positive reports about our strong and expanding ties with the Government and people of Trinidad and Tobago.
Over the last few months we have finalized a number of important mutual assistance programs. And I am confident we will continue to have an increasing number of active and engaged partnerships, across a broad range of areas, to include regional security, economic development and trade, and human rights.
The one issue that I had hoped would be resolved before my trip was FATCA legislation. I expressed the concerns of the Government of Trinidad and Tobago to US Treasury representatives.
The Government of Trinidad and Tobago has submitted to the Treasury a detailed explanation and step-by-step plan that Trinidad & Tobago intends to follow to bring the FATCA agreement into force. I will continue to work with Treasury representatives and Government of Trinidad and Tobago officials to assure that the Government of Trinidad and Tobago follows this plan and continues to work in good faith towards implementing the FATCA agreement.