Mon | Oct 14, 2019

US tax laws could trigger bank fee hike

Published:Friday | May 4, 2012 | 9:59 AM

Livern Barrett, Gleaner Writer

One Jamaican tax expert is raising concern that a new United States tax law expected to take effect on January 1, 2013 could lead local banks and other financial institutions to increase their fees.

Allison Peart, who is a partner at the accounting firm Ernst & Young, said the increase could come as these institutions begin to implement measures that will enable them to comply with some of the stipulations in the legislation.

The Foreign Account Tax Compliance Act (FATCA), was passed into law by the

US Congress in 2010, as part of an attempt by the US to widen its tax net to include “American persons” who have substantial income in a foreign country.

The law will require foreign financial institutions to provide the US Internal Revenue Service with information on these individuals.

Faced with a 30 per cent withholding penalty for failing to comply with the reporting requirements, Peart said it is almost certain Jamaican companies will act in accordance with the law.

She said implementation will be at huge costs to the companies and these will most likely be passed on to customers.