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Sunday, December 25, 2016

Maybe the Spirit of Christmas will take possession of the Government and Opposition and instill in them the peace, forgiveness, grace, and atonement to make them conscious that, at least on matters on which the good health of the external and internal economy hinges, ie, the passage of the FATCA legislation, they should place the national interest before partisan objectives.

Surely they must be aware of the anxieties they have created by the power games being played with the passage of the Tax Information Exchange Agreements Bill, the T&T legislation required for this country to become compliant with the US Foreign Accounts Tax Compliance Act (FATCA).

Failure to pass the legislation in time may not cause the “sky to fall down,” but the result of such failure will be that “Foreign Financial Institutions that enter into an agreement with the IRS to report on their account holders may be required to withhold 30 per cent on certain payments to foreign payees if such payees do not comply with FATCA,”; so states the literature accompanying FATCA.

Local bankers have said that contrary to the claims of Opposition Leader Kamla Persad-Bissessar, the increase in the cost of financial transactions will not apply only to the large firms, but the law will also require people engaging in small and large transactions through US correspondent banks to pay more for such transactions.

An official of the International Monetary Fund here in PoS last month said non-compliance of countries could eventually lead to large US banks ending correspondent relationships with small Caribbean banks, whose business is not worth the trouble and hassle they will have to face from the IRS and the US Treasury.

The Opposition is demanding that the bill be sent to a Joint Select Committee of the Parliament and it is doing so on the basis that at the level of the JSC, both sides will have the ability to call on expert opinion from outside the Parliament for advice.

This is notwithstanding the fact that the bankers, the non-bank financial institutions, and the business community, the ones with the direct interest and expertise, have already given their advice, and they are satisfied with the technical detail of the amended legislation.

Moreover, it is clear that this piece of draft legislation is not of the type requiring in-depth technical and legal expertise for it to become “good law”.

Clearly the Opposition United National Congress is intent on extracting its pound of political mileage by making the Government grovel. But as has become the norm in such matters, it is partisan politics which dictates economics, legal considerations, and even good sense. “Politics has its own morality” and logic.

Over on the other side of the floor, this Government, almost as a means of seeking to cloud its inability to so far refloat the economy and conquer criminality, has been seeking to drown Kamla Persad-Bissessar and her team in a tsunami of allegations of wrongdoing, incompetence, mismanagement, and nepotism in the hope of making the UNC unattractive as an election proposition.

Be that as it may, the PNM in government is faced with the requirement to have the Opposition support the bill if it is to be passed into law; it therefore finds itself (the majority) under the tyranny of the minority.

Having indulged in its quota of “grand charge” and robber talk, the time is now for the opposition leader to show good faith and to lead her troops into the Parliament chamber for the two sides to argue and eventually agree on the best option to have the legislation passed.

With the Government requiring the Opposition support to pass the bill into law, agreeing to the JSC may be the only practical option; the Government having the ultimate responsibility to avoid the negative consequences of not becoming FATCA compliant will have to agree to use the JSC route.

Thereafter, the Government and the Opposition will select their respective teams for the JSC and agree to send the motion to the Upper House for the Senate to select its representatives on the JSC.

If Persad-Bissessar and her team are to be taken seriously, they will “come inside,” argue their case, and allow the process to unfold.

Going to the Chamber does not mean having to forgo their demand for the JSC route; indeed, it will strengthen their case if the Government does not yield to their request.

To stay away from the next sitting of the Parliament will give any objective observer the right to write-off the UNC as parochial obstructionists, not serious about the welfare of the country, interested only in blocking the Government.

In addition to the immediate objective of passing the FATCA compliance bill, the process of coming together has possibilities for establishing a basis for future co-operative action to pass vital legislation in the Parliament.

The Government has a real stake in the evolution of such a climate. Listed on the legislative agenda in the short term—2015-2017—are the Cyber Crime Bill, the Proceeds of Crime Act, the Insurance Bill, the Abolition of Trial by Jury Bill, the Customs Act and at some point in the future, the intention of the Government to establish the Revenue Collection Authority and doubtless other pieces of legislation of great importance to the economy and society.

Is there going to be gridlock and “bad mind” politics or will quality governance evolve starting in the Parliament?


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