Prime Minister Dr Keith Rowley is keeping a confident outlook on the FATCA matter as he says what is shaping up so far on Government’s request to the US for an extension of Friday’s deadline of the Foreign Account Compliance Agreement (FATCA) is looking good.
Speaking at a media briefing yesterday, Rowley said he had every confidence the US would grant an extension of the deadline, following the collapse of the relevant Tax Information Sharing Bill in Parliament last Friday. Rowley’s comment seemed supported by a statement from US ambassador to T&T John Estrada, who said he was in the US attempting to work with US Treasury officials in the matter.
“The Government of Trinidad and Tobago has submitted to the Treasury a detailed explanation and step-by-step plan that Trinidad and Tobago intends to follow to bring the FATCA agreement into force.
“I will continue to work with Treasury representatives and Government of Trinidad and Tobago officials to assure that the Government of Trinidad and Tobago follows this plan and continues to work in good faith towards implementing the FATCA agreement.”
At his briefing yesterday, Rowley said Finance Minister Colm Imbert would have instructed public service officials to write their US Treasury counterparts seeking the extension.
He said a lot of investment in T&T is made by US companies and the US Government would therefore have an interest in ensuring this country does not go down the road of FATCA sanctions.
Noting that Government has signed customs and other US agreements which the former People’s Partnership (PP) administration didn’t pursue, Rowley added: “Notwithstanding the hiccups (non-passage of the Bill) in Parliament, we are closer now to the FATCA signature and legislation than we ever were.
“I expect that the US, having received our request for an extension and seeing exactly what is going on here, will treat T&T as a country where the government is serious about co-operating and collaborating and complying with the requirements.”
He added: “Against that backdrop of this Government co-operating and bringing to the fore what has been left to languish, I have every confidence, and I expect the US will give us the extension we asked for, as our intention to comply is clear.”
Dismissing claims that Government had prior knowledge of an extension, Rowley said they didn’t have any document or commitment from the US on “our national irresponsibility.
“We expect they will treat us as a responsible trading partner who has a lot of US investments in T&T and there’s nothing to be gained by the US or T&T if T&T’s economy is damaged by the negative action that could flow from irresponsible action.”
He said he did not know why there was speculation anything would happen between now and Friday’s deadline but said the 2017 budget would be presented on Friday and Government would await a response from the US on the extension—to get more time to debate the matter—and return to it after the budget debate.
UNC planned walkout
PM Rowley devoted most of the briefing to bashing the Opposition’s action in the issue, accusing it of “contriving to walk out” of Parliament last Friday in a pre-planned charade” and of inciting the US and engaging the US ambassador.
The PM said Government shouldn’t be scolded for the situation since “...we did what we needed to do.”
The PM attempted to steer clear of possible negative consequences—a 30 per cent tax imposed by the US on financial transactions—if the extension didn’t materialise.
Asked about the tax, he said the “likelihood of the outcome is known to everyone and it is not a pleasant one.” But he said there was no way for Government to “push” on the extension.
He said Government had started work on it early and presumed it would work out in T&T’s favour since the US would see what happened with the Bill’s stagnation in the Parliament.
On contingencies if the extension didn’t occur, he said: “Like what? You tell me. It’s a straightforward matter. Is either we comply as laid down by the US and their banks, or we don’t. There’s no alternative.”
Slamming the Opposition’s views—and noting the derisking of Belize—he said the consequences could be very grave.
“If you have a transaction abroad and can’t get the corresponding banking arrangement, ask yourself what condition you’ll be in,” he said.
On alternatives, he said if T&T found itself in a situation where “we failed by Opposition foolishness, then we are saying we are prepared to accept the sanctions. The consequences could and would be very serious if we don’t get the extension and we get derisked.”
He said banks could try alternatives but this might be costly and torturous and T&T would be damaged.
Asked if T&T should be prepared for the 30 per cent tax, Rowley said that would be a necessity for all if the extension was not obtained. If it came to that, Rowley said it would damage T&T’s circumstances in “more ways than one,” including budget figures, revenue and T&T as an investment location.
But he said the US has an interest in not bringing that about in T&T, since a lot of investment in T&T is made by US companies.
Asked about an IRS statement which seemed to suggest the deadline for legislation to be passed was not in fact September 30 but in January 2017, Rowley said these were “milestones” to meet along the way and “you’ll be gambling if you don’t meet one milestone and hope to meet the other.”
He said September 30 was not the end and an extension would then bring about another deadline.
“Whether long or short we don’t know. We as a Government did all we were required to but we only have 23 votes.”
He said the difference between success and failure lay in the Opposition’s hands, noting he did not know what the Opposition would do when Government returned to debate on the issue.
On the UNC’s insistence for a Joint Select team, he said the matter could be properly discussed in Parliament.
Asked if Government could not try one more time before the budget, Rowley said, Government “had a little more information on the issue than the public knew but wouldn’t reveal it yet.” He said some UNC MPs were also panicking at non-passage of the Bill and FATCA implications for them. He also dismissed the Opposition Leader’s threat of legal action against Government.