Sat | Sep 22, 2018

Jamaica improves in rank of financial complexity

Published:Friday | April 13, 2018 | 12:00 AM

Jamaica has improved its ranking in the complexity of financial compliance for 2018, moving up eight places to 53 out of 94 countries when compared with the score it achieved a year ago.

In 2017, Jamaica ranked at 45, while the Cayman Islands retained its top position at 94 over the two survey periods.

Based on the survey, undertaken by the Netherlands-headquartered TMF Group, 94 jurisdictions were ranked in order of financial complexity with one being the most complex, through to 94 being the least complex.

According to the report released this week, the financial complexity index looks at the world's nations by complexity of financial compliance, meaning the ease with which companies can deal with taxes, adhere to reporting requirements, maintain company accounts, and deal with cross-border transactions.

Jamaica and the Cayman Islands were ranked based on their performance among countries in the Americas, but other member states of the English-speaking Caribbean were not among those selected for the study.

Financial compliance, primarily regarding the Securities (Retail Repurchase Agreement) Regulations, is among the key measures outlined to be undertaken by the Government under Jamaica's standby agreement with the International Monetary Fund.

The TMF Group noted that more complex nations require firms to spend more time, money and effort on compliance, and that can affect performance and profitability.

Turkey's moves to simplify its economy see it knocked from the top spot by China, which the TMF Group described as "a notoriously complex country, despite efforts to comply with global needs and open up to foreign investment".

One of Europe's biggest economies, France, enters the top 10 this year, "but with the new administration moving to simplify the country's complex tax and reporting system, it may be a mere guest appearance, while the United Arab Emirates' introduction of value-added tax alters its tax-free haven status and adds a new layer of complexity for businesses," the Group added.

The researchers said that as previously, Latin America makes up half of the top 10 most complex countries, with Brazil again ranked second.

In the survey, in-house accounting and tax experts were asked to rank the complexity of their local jurisdiction according to four overarching parameters: cross-border transactions, corporate representation and data storage requirements and methods; tax registration, compliance regulation and types of taxes; legal regulations and local reporting process, as well as accounting regulations, relationship with authorities and technology.

The top 10 most complex jurisdictions for accounting and tax compliance were China, France, Brazil, Bolivia, Colombia, Mexico, Russia, Turkey, Italy, and Argentina.

The least complex in ascending order of ranking are Cayman Islands, British Virgin Islands, Jersey, Hong Kong, Curacao, Afghanistan, Guyana, Norway, Bangladesh and Singapore.