FATCA is still with us. Looming over financial services like a great big Golden Eagle, it has been gliding on the hot air of dissension for a few years, but make no mistake the FATCA bird is going to swoop down soon.
Like all regulations which cause industry wide change, FATCA has been taking hits from various jurisdictions around the world, which is the normal response from the finance industry when it comes up against the requirement to invest in technology developments that do not have an obvious business benefit. The tactic is always to rebound back to the inflicting authorities with a myriad of reasons why the laws and rules cannot be implemented, in the hope and expectation that the authorities do not know enough about the market mechanisms or technology to know any different. This has certainly been the case with many regulations that the rest of the developed world has been forced to adhere too. Implementing a global regulation is always a tough call, but in the current economic environment one that had very little chance of being waved through unopposed.
However, the issues that the financial world has with FATCA should not dull the appetite for this regulatory requirement not to be enforced by the revenue authorities across all markets. Indeed the UK has been adopting FACTA like positions already and a UK version of FATCA will no doubt emerge sooner or later. Quite right too in my opinion.
In fact all financial markets worldwide should be made to comply with FATCA, as a kind of test model for a similar requirement to be introduced by their own revenue authority. It is in this way that a global net can be created enabling tax avoidance by the rich and criminal to be eradicated. It’s a small price to pay for financial services firms to buy into the FATCA type projects, which should be viewed as an international development not simply by the will of the USA.
I find it hard to understand the resentment that FATCA has engendered, when in truth it’s a vital piece of tax management that only jeopardises the criminal. The financial markets have to ensure that they are seen as strong and resilient by working with government tax authorities for the good of all.
Isn’t this a good PR job for the financial services industry to undertake for the benefit of society?