TRN for money transfers not a tax trap, says BOJ
Published:Wednesday | September 1, 2010 | 12:00 AM
Avia Collinder, Business Writer
A mandatory requirement for the production of a taxpayer registration number (TRN) by persons doing money transfer transactions took effect this summer, three years late.
A central bank official says the measure is a delayed response to a stipulation under law for all financial institutions to fully comply with the customer information requirement of the Proceeds of Crime Act Money Laundering Prevention Regulation 7(5) and is not intended to be a precursor to additional taxation measures.
The requirement should have taken effect from March 29, 2007, the date of the regulation, but was only actually enforced this summer.
Larene Samuels, the director of cambio and remittance services at the Bank of Jamaica told Wednesday Business that the law's intent is to ensure that financial institutions take appropriate customer due diligence and identification measures in carrying out financial transactions.
BOJ unaware of plans
Samuels said the BOJ was not aware of any plans to use the TRN information to add new taxes to foreign exchange transactions, as is the case in other jurisdictions.
In the Cayman Islands, the Government recently implemented new tax measures to shore up its coffers by CI$2 million this fiscal year.
Through legislative changes, it became mandatory for all money-service businesses to collect, on behalf of the Government, a two per cent transaction fee equivalent to CI$2 for every CI$100 transferred and capped at a maximum transaction fee of CI$10.
Meanwhile, the BOJ is reporting the continuation of modest increases in net remittance inflows for the first six months of 2010. Remittances of US$928.2 million were recorded in the half year to June, 8.7 per cent more than the amount recorded for the corresponding period of 2009.
The central bank recorded increases in remittance inflows in each of the six months, relative to the year-prior periods.
BOJ said, however, that the performance of the sector was tempered by events in west Kingston.
The remittance gains in May, according to the BOJ, were negatively affected by closure of some remittance outlets during the week of May 24 when the west Kingston uprising was at its peak.
"Higher levels of inflows would therefore have been recorded if these exceptional circumstances had not
Monthly RemittanceInflows (US$M)
2010 2009
January 136.2 134.1
February 142.1 132.3
March 174.1 145.9
April 162.2 141.7
May 156.0 146.1
June 157.7 153.8
Total 928.2 853.9