Governments in the region will be better able to prevent tax evasion and recover lost taxes with the implementation of an Automatic Exchange of Information (AEOI) Implementation Seminar, reports SKN Vibes.
An implementation seminar, which focuses on Legislation and Confidentiality and Data Safeguards commenced on Tuesday, January 26, at the Ocean Terrace Inn Conference Room that will end on Thursday, January 26. It is attended by participants from around the region.
Prime Minister, Dr. the Honourable Timothy Harris, in his opening remarks, explained the reasons for the seminar.
“As you are aware, the reason we are here is because there is now a new global standard for automatic exchange of information to which, I am advised, six of the countries represented here have committed to implement by 2017, while another nine have committed to implement by 2018,” Dr. Harris said.
Prime Minister Harris deemed the seminar as extremely vital and noted that it is completely necessary to have both the legal and administrative requisite frameworks in place to facilitate the smooth implementation of the new standard.
“The enactment of appropriate legislation is an important aspect of the implementation of the new standard where, as I understand it, the reporting and due diligence rules would have to be specified in the domestic legislation of our respective countries,” the prime minister stated, while adding that as with any other piece of legislation all Members of Parliament aim to get it right the first time around.
Dr. Harris explained that many countries in the region are categorized as financial centers. He stated that such categorizations put the region under scrutiny by the international community “and for various reasons, has the potential to adversely affect the relationship that financial institutions have with their correspondent banks.”
He stated that the Caribbean region must do all in its power to honour commitments made and comply with the international standards. “The new standard for automatic exchange of information is something that is new to many of us, even as we continue our efforts at implementing a similar version of the standard,” he said, while referring to the United States of America (USA’s) Foreign Account Tax Compliance Act. (FATCA).
Prime Minister Harris expressed gratitude to the representatives from the Global Forum Secretariat for journeying across the Atlantic to assist with drafting the requisite legislation.
Dr. Harris explained that the exchange of information under the new standard will be mutual and noted that the region will be receiving information from a wide range of countries, as opposed to just sending. He stated that “appropriate systems and procedures must therefore be in place to protect the confidentiality of financial account and tax information that is exchanged under any form of tax exchange mechanism.” He said that these “systems and procedures should not just be on paper in terms of documenting what the ideal practices should be, but in the execution of what is documented.”
The Forum which comes to a close on Thursday, January 28, is attended by St. Kitts and Nevis’ Deputy Financial Secretary, Mrs. Sylvia Gumbs, Donal Godfrey, Deputy Head of the Global Forum Secretariat and other representatives of the Global Forum Secretariat and participants.
The AEOI was developed by the Organization of Economic Cooperation and Development (OECD) and The Group of Twenty (G20) with the input of other jurisdictions and in consultation with the financial industry. The Standard is very similar to the Model 1 Intergovernmental Agreement (IGA) that many jurisdictions will use for implementing the United States Foreign Account Tax Compliance Act (FATCA).