New US tax law could force Jamaicans to buy locally

A new US tax law may force more Jamaicans to buy locally. Under the
Financial Account Tax Compliance Act (Fatca) regulations, local
financial institutions that sign the agreement with the US Inland
Revenue Service (IRS) are required to identify, document and report on
the accounts of ‘US persons’ in an effort to improve compliance in the
area of foreign financial assets and offshore
accounts.

“What [the IRS] is looking for is US indicia (that is) if you have a US
address or if you’re born there,” tax specialist, Allison Peart
explains. This does not automatically define the account holder as a ‘US
person’ but indicates that the account requires closer scrutiny.

“Some of us like to buy foreign goods and [might] have an address
overseas that we have to put our credit card on,” she said. Those will
be reported to the IRS.

The main concern for individuals is the issue of privacy. Persons may
avoid shopping in the US in an effort to prevent the sharing of their
account information with the US agency.
But those with more disposable income could continue to buy overseas,
anyway, she says, since they may decide to remove the US address from
their bank accounts and travel instead.
“I don’t really see where Fatca will affect persons who shop overseas
[but] because the regulations are still incomplete, it’s hard to tell
what would happen,” she says, “[the IRS] may very well decide to remove
persons living in Jamaica with just a US account [from the definition]”.
Jamaicans are still learning about Fatca, she says, adding, “after a while, people will get used to the system”.
The Act was passed in 2010 and takes effect January 2013.
www.jamaicaobserver.com 

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