Gov’t tightens rules in money-laundering fight
Published:Thursday | December 17, 2020 | 12:28 AM
The buying and selling of foreign currency or foreign-currency instruments and the provision of electronic retail payment services have been designated financial services under the Banking Services Act.
The House of Representatives on Tuesday approved two motions designating the services provided by cambios and electronic retail providers as financial services.
Finance and the Public Service Minister Dr Nigel Clarke said that the move would now harmonise local laws with the international anti-money-laundering framework.
“Given the requirement in the international standards for financial groups to be subject to appropriate anti-money laundering and countering of the financing of terrorism risk controls, expanding the definition, as recommended, would address the possible consequences of these omissions,” Clarke told his parliamentary colleagues on Tuesday in Gordon House.
In his remarks, Opposition Leader Mark Golding said that the basis for tweaking the law was the perceived gap in Jamaica’s overall system of buffers against money laundering and terrorist financing.
“The primary reason for this is the pressure that we are under to try and get our house in order nationally in terms of the fight against money laundering and terrorism financing,” he insisted.
Lawmakers also approved on Tuesday the Income Tax (Amendment) Act. The legislation will make effective the micro, small, and medium sized enterprises (MSMEs) income tax credit, which was introduced during the Budget Debate earlier this year.
“If it is not enacted this year, it means that the tax credit for MSMEs would not be applicable for the year 2020,” said Clarke, who piloted the bill.
The finance minister said that the provision of the tax credit of $375,000 to every MSME that filed taxes is part of a suite of measures that included the abolishment of the asset tax on non-financial businesses, the abolishment of the minimum business tax, and an increase in the GCT threshold from $3 million to $10 million implemented over the past two years.
HITTING GDP TARGET
The House of Representatives also gave the nod to the Financial Administration and Audit (FAA) Act with two amendments.
Clarke, who started debate on the bill last week, said the amendments would facilitate the pursuit of an adjustment path that is consistent with achieving the 60 per cent debt-to-GDP target in 2027-28 alongside gradual economic recovery.
“The proposed amendment seeks to lengthen the time period allotted for recovery as well as to reduce the minimum required adjustments in any one year,” the minister said.
He said the intention was never to amend the FAA Act at any point that things seem difficult.
“This year is not any year with any ordinary difficulty. This is the year of a one-in-a-hundred-years pandemic with the worst economic decline in Jamaica’s entire history and in the context of a global economic decline of historic proportions not seen for at least 90 years. That’s the context in which we are seeking this amendment,” he told Parliament.
Commenting on the bill, Golding observed that the fiscal rules had been amended twice during the current fiscal year.
He said that the first amendment expanded the circumstances in which the fiscal rules could be extended to include health crises. It was also adjusted to defer by two years the target date for the public debt to be reduced to 60 per cent of GDP. The previous target was March 31, 2026.
The memorandum of objects and reasons states that the fiscal response required in financial year 2020-21 to address the impact of the COVID-19 pandemic generated a deviation in the central government fiscal balance of 3.7 per cent of gross domestic product.
It says that the automatic correction mechanism under the FAA Act requires adjustment measures in the coming fiscal year of at least 1.5 per cent of GDP in conformity with the law and further adjustment of 2.2 per cent of GDP to be applied in the ensuing year.