GROUP 1 ACT403 Advanced Taxation PDF

[**Question 1: 2**](#_2j3gvyxv9muu) [**Question 2: 5**](#question-2) [**Question 3: 7**](#question-3) [**Question 4: 10**](#question-4) [**Question 5: 13**](#question-5) [**Question 6: 15**](#question-6) [**Question 7: 17**](#question-7) [**References 20**](#_qlpyng1sy31i) Question 1: ======...

[**Question 1: 2**](#_2j3gvyxv9muu) [**Question 2: 5**](#question-2) [**Question 3: 7**](#question-3) [**Question 4: 10**](#question-4) [**Question 5: 13**](#question-5) [**Question 6: 15**](#question-6) [**Question 7: 17**](#question-7) [**References 20**](#_qlpyng1sy31i) Question 1: =========== Identify and explain international trading and trading blocs. ------------------------------------------------------------- "I do believe that international trade benefits both nations," this is a quote from American business magnate, the co-founder of NIKE, Phil Knight. International Trading is the concept of exchanging goods and services between at least two different countries. This exchange can either be an import, when goods or services are brought into the domestic company or export when goods and services are sold to a foreign country (CFI Team, 2024). International trading has become business in recent years and this is so because many countries seek to take advantage of the comparative advantage which gives them and their citizens more opportunities for better price and quality of goods and services. Trading blocs are agreements between two or more countries which remove or reduce trading barriers between those who are a part of it (WWG, 2019). These agreements promote economic integration and are more structured in world trading. The types of trading blocs include the following. Preferential trade areas (PTAs) are typically the first step in the formation of trading blocs. They are agreements between nations in the same region or close proximity to one another to reduce or eliminate tariffs on specific goods so that they have an advantage when trading with nations outside the region. An example of a PTA would be the treaty for Eastern and Southern Africa. This was signed in December 1981 but came into effect in September 1992 with nine member states with the headquarters located in Lusaka, Zambia. Today there are 21 Member States including countries such as Tanzania, Angola, Ethiopia, Kenya and Malawi etc. The main goal of these treaties were to promote cooperation and integration covering all areas of economic activity. These areas include trade and customs, industry, transport and communications, agriculture and monetary affairs. They plan to accomplish this by reduction and elimination of trade barriers on selected goods traded within the area (FAO, n.d.). Free Trade Zone (FTZ) is a more complex form of trading bloc. This is an agreement between countries to completely remove tariffs and duties when trading. It can be between countries in the same region or on a wider scale. An example of a free trade zone is The Caribbean Free Trade Association (CARIFTA) which was established on 15 December 1965 by Antigua and Barbuda, Barbados, Guyana, and Trinidad and Tobago. CARIFTA's main goal was to promote a steady balance development within trading in the Caribbean by liberalising trade and setting up rules for all members to follow to protect the smaller enterprises. Trade liberalisation refers to removing tariffs and quotas on goods produced and traded within the area, ensuring fair competition. In 1973, CARIFTA became the Caribbean Community (CARICOM) with twenty countries: fifteen Member States and five Associate Members currently(CARICOM.org, n.d.). Customs Union is an agreement between two or more member states to grant free trade among themselves but charge one set tariffs to the rest of the world. The European Union (EU) is a great example of a customs union. It consists of twenty- seven (27) member states including countries such as; Austria, Denmark, Finland, France etc. The EU policies are designed to ensure the free movement of people, goods, services and capital within their internal market, but all member states have a common tariff rate for external countries. Even though the tariff rate is the same for the EU member states, the rates of duty may differ from one kind of import to another. This may be due to the sensitivity of the goods and the importation location. A common market (or single market), this trading bloc is considered as the highest level of economic integration if done right. A single market is an agreement between two or more countries to establish common tariff and non- tariff barriers to importers while removing all international trading barriers allowing free movement of goods, services, labour and capital among themselves. The European Economic Community was the first example of a single market, even though it is also a customs union. The European Economic Community (EEC) was a treaty created in 1957 by Rome to promote and facilitate economic integration, including a common market, among its six founding members. These members are Belgium, France, Germany, Italy, Luxembourg and the Netherlands. It is now known as the European Union. The EU has roughly 500 million people and uniform rules and regulations. One of the most successful examples is that a single market is possible as long as member states are willing to cooperate for the greater good of their nations (Cordoba, 2018). In conclusion, the idea of exchanging goods and services among countries is known as international trading. This type of exchange can result in a country obtaining goods and services from other countries or providing goods and services to other countries. In an effort to reduce the restrictions on the exchange of goods and services, trading blocs are created. This allows participating countries to trade more freely with the burden of barriers to trade being reduced. Based on your research, argue for and against Jamaica being a part of a trading bloc. ------------------------------------------------------------------------------------- Jamaica is currently a developing country, participating in international trade, competing against larger, more developed countries, based on research done; we would argue that Jamaica would benefit greatly from being a part of a trading bloc. If Jamaica is a member of any trading bloc, we would have access to other member states\' markets. This would allow us to be able to penetrate more markets with our specialised goods and services such as our bananas or our Blue Mountain Coffee. Being a part of a trading bloc means that Jamaicans would have access to a larger market of goods and services at a reduced or no import cost. By being a part of any trading bloc, Jamaica would have an advantage on a greater scale in the international trading world as we would now be considered a stronger bargaining partner in negotiations. More job opportunities would be created for locals, especially the newer generation entering the workforce as they would be able to travel freely to another nation to be a part of their workforce and be gainfully employed. Lastly, Jamaica would benefit from more foreign investments. It would be easier for countries to invest in the country due to the decrease in trading barriers, creating more employment opportunities as well as improving infrastructures. In conclusion, it would be very beneficial to Jamaica and its citizens, if the government is in agreement with trading blocs. This benefit opens a greater target market for Jamaican produce, whereby goods produced in Jamaica can be sold internationally without the burden of heavy restrictions against trading. Trading blocs also open up opportunities for investment in local companies and corporations by international figures. Question 2: =========== Compare and contrast CARICOM and CSME. -------------------------------------- "CARICOM is the only hope for our Caribbean civilization to rise to the challenges of global inequality and small island isolation," this is a quote from Antiguan and Barbudan minister, Chet Greene. With different but connected goals, CARICOM (Caribbean Community) and CSME (Caribbean Single Market and Economy) are two essential components of regional integration in the Caribbean. CARICOM, which was founded in 1973, provides its fifteen member states with a wide framework for advancing social development, political stability, and economic cooperation. In order to promote harmony and cooperation amongst other nations, it places a strong emphasis on group activity in areas like trade, security, and cultural exchange (Seatzu.F, 1970). On the other hand, the more narrowly focused CSME proposal was introduced in 2006 with the goal of establishing a single economic area that would allow member nations to freely move labour, capital, products, and services. By lowering trade barriers and facilitating smooth cross-border company and individual operations, this effort aims to improve regional competitiveness and economic resilience (Seerattan, 1970). Although CARICOM establishes the fundamental guidelines for regional integration by tackling more extensive socio-political concerns, CSME serves as a useful tool to put these guidelines into practice by implementing certain economic policies and regulatory structures. In conclusion, the improvement of the socioeconomic environment in the Caribbean is the same objective of both CARICOM and CSME. However, their approaches are different, with CSME emphasising market efficiency and economic integration while CARICOM focuses on broad cooperation. What is CARICOM doing to align the tax policies among its member countries? --------------------------------------------------------------------------- CARICOM is aggressively working to bring its member nations\' tax policies inline in order to promote increased economic cooperation and lessen differences that may impede regional integration. The creation of a framework to harmonise tax systems, especially in areas like corporate taxation and value added tax (VAT), is one of the main projects. By reducing tax rivalry amongst member states, the initiative hopes to promote a more cohesive economic environment (Schlotterbeck, 2017). In addition, CARICOM highlights the significance of following global guidelines for tax transparency and compliance. This has prompted efforts to counteract tax evasion and avoidance, such as alignment with the Base Erosion and Profit Shifting (BEPS) framework of the OECD. By enabling information sharing and cooperative compliance among its members, CARICOM intends to establish a more efficient and equitable tax environment (Alcock, 2003). Furthermore, CARICOM offers member nations capacity-building initiatives and technical support to improve their tax administration frameworks. This all-encompassing strategy encourages sustainable development throughout the Caribbean while also advancing economic stability in the area. CARICOM\'s endeavours demonstrate a dedication to cultivating a cooperative and equitable taxation system that is advantageous to each and every member state. Question 3: =========== Compare and contrast international tax avoidance and evasion. ------------------------------------------------------------- "The only difference between tax avoidance and tax evasion is the thickness of a prison wall," this is a quote from renowned British Politician who served as Chancellor of the Exchequer and Secretary of State for Defence, Denis Winston Healey. According to Dodd (2024), tax avoidance refers to the legal exploitation of the tax system by an individual or a company in order to pay a minute amount in taxes. International Tax avoidance is brought about when multinational corporations use measures to manipulate the fiscal policy in an effort to legally reduce the amount of tax owed. On the other hand, Rodrigues (2024) refers to tax evasion as an illegal scheme used to reduce tax liability through the use of fraudulent craft. International Tax evasion comes into play when illegal methods are used by individuals or companies to pay as little as possible for their taxes due by failing to report international income earned in different jurisdictions. Though both international tax avoidance and international tax evasion are similar in that they seek to minimise tax liability on income earned domestically and internationally, they are different in their legality and method of implementation. As previously mentioned, both international tax evasion and international tax avoidance are similar in that they both aim to minimise the amount of tax to be paid (Kagan & Rubin, 2024). As a result, both terms are often misused interchangeably due to this similarity. However, international tax evasion and international tax avoidance are not one and the same. They are completely different in law as international tax evasion is done illegally using fraudulent methods and is punishable by the law under different jurisdictions. International tax avoidance is done under legal standing with the use of tax laws in different jurisdictions. For example, a company may operate in countries where the tax liability for foreign businesses and individuals have little to no tax liability. This is known as a Tax Haven and is a form of international tax avoidance as companies may choose to set up subsidiaries in these countries. For international tax evasion, companies and individuals may use Swiss Bank accounts to hide income and assets; this is possible due to Switzerland's strict banking secrecy laws. In conclusion, both international tax avoidance and international tax evasion are similar in that they aim to reduce the amount paid in taxes, domestically and otherwise. However, they are different in their legality and the methods used in achieving this reduction in tax payment. Describe what Jamaica has done or can do to mitigate against international tax avoidance and evasion. ----------------------------------------------------------------------------------------------------- Jamaica recognises the presence of international tax avoidance and tax evasion and has therefore put in place measures to mitigate against their occurrences. One of the measures that Jamaica has implemented include the signing of the Tax Information Exchange Agreements (TIEAs) with the United States and other countries (International Trade Administration U.S.A, 2024). This agreement is beneficial not only to avoid double taxation but it also aids in the prevention of income tax evasion. That is, through the exchange of tax related information between the United States and Jamaica, Jamaica is able to identify and fight against the possibility of tax evasion. Jamaica has also joined the OECD's BEPS Project. Base Erosion and Profit shift refers to a planning strategy used by multinational corporations to take advantage of loopholes in the tax legislations by artificially shifting the low or no-tax locations in order to avoid tax payments (OECD, n.d.).Through the participation of OECD's BEPS project, which is aimed at shutting the gap in international tax rules that allows profit shifting, Jamaica is also to intensify its tax framework and thereby reducing the opportunities relating to tax avoidance. Additionally, Jamaica has implemented the Common Reporting Standard (CRS). That is, through the CRS, jurisdictions can obtain the necessary financial information from their financial institutions and exchange them with other jurisdictions automatically on a yearly basis (PWC, 2024). This assists tax authorities in tracking foreign income and assets held by the residents. With this information, these residents are then taxed accordingly, reducing the likelihood of tax evasion. In conclusion, Jamaica has implemented ways to mitigate against international tax evasion and international tax avoidance. These measures include signing TIEAs with the United States and other countries, joining the OECD's BEPS initiative, and implementing the CRS. Though the measures have not been exhausted, the few mentioned are essential in the reduction of international tax avoidance and evasion. Question 4: =========== Explain what you understand by the statement that tax havens are essentially booking centres. Give examples of countries that are considered tax havens. -------------------------------------------------------------------------------------------------------------------------------------------------------- "We want to put a stop to tax havens," this is a quote from former president of France, Nicolas Sarkozy. Tax Havens are countries or regions with relaxed rules, little to no tax legislation, and secrecy laws. By relocating earnings or other financial assets there, they let people or businesses pay less in taxes. They also allow individuals and businesses to shelter income, assets, or profits to reduce their tax liabilities in their home countries. Booking centres refers to banking, securities, or derivatives transactions organisation that opens and maintains the pertinent client or counterparty. This organisation bears the main responsibility for the delivery or payment of a financial product. Financial institutions typically identify a booking entity within the group in a particular jurisdiction to handle the booking process, where the transactions in different financial products will be \'booked\' to the balance sheet of such a booking entity. A booking centre and a tax haven are similar in that they both serve to expedite financial transactions while minimising regulatory supervision and taxes. Though they have slightly different uses, both structures are frequently used in financial planning and tax minimization strategies. Tax havens conceal the assets of corporations and individuals who intend to evade taxes. However, booking centres are frequently utilised by financial institutions or multinational corporations to schedule transactions in advantageous jurisdictions. A nation or territory with its own set of rules and regulations is considered a tax haven like Hong Kong, Cayman Island and the British Virgin Island etc. If an organisation complies with the regulations of both its home country and the tax haven, it is permissible or not illegal to incorporate offshore businesses or transfer assets there. In conclusion, Tax Havens are referred to as Booking Centres due to the relaxed laws and regulations concerning taxes in these jurisdictions. Corporations and individuals use Tax Havens as a means to escape burdensome tax laws and generate more income. Booking centres on the other hand, hold information regarding assets and transactions done by the account holder, thereby keeping secret transactions done by the account holder. State if you believe Jamaica could achieve advantages and disadvantages of being a tax haven. --------------------------------------------------------------------------------------------- One of the primary benefits that tax havens may have for developing economies is the potential to increase employment levels (De Jantscher, n.d.). For nations with little resources, this is especially alluring. Yet, operations involving tax havens also generate a sizable number of jobs. The creation of hundreds, even thousands, of firms and trusts, as well as the numerous transactions that ostensibly occur in tax haven nations, are typically carried out with a minimal number of workers in the tax haven nation. Building construction is increased, mostly for commercial purposes. Which is far less than the tax haven industry\'s size would suggest because hundreds of Holding companies and other subsidiaries might only need a nameplate or adequate wall space for their offices. Large amounts of office space are only needed by businesses that truly do something, which are primarily financial sector businesses. Tourism is another activity that might be encouraged, especially if the nation has a pleasant environment and holding board meetings is a prerequisite for incorporation. In addition to offering work opportunities and foreign exchange earnings, retired individuals' may choose to dwell in a tax haven nation. There are further significant implications of having a sizable financial industry. A free and open foreign exchange and payments system may be maintained by the nation with its assistance. Having a financial market that is easily accessible also has serious advantages. Financial institutions from outside may underwrite or subscribe to government bond issuance, providing capital for public investment and economic growth. Lastly, the government receives income from the tax haven industry. No matter how tax-friendly a nation\'s tax code is; foreign investors will always be responsible for some kind of tax or charge. These payments take several forms, from income tax on profits deemed to be of domestic origin to a straightforward annual charge payable by all firms founded in the nation. Does obtaining all these benefits come with a cost? Indeed, and this is usually not quite obvious when nations aim to be tax havens but could end up being burdensome in the future. The degree of development of a nation, the size and makeup of its tax haven sector, and the benefits bestowed upon it all influence the issues raised and limitations placed upon it by its tax haven status. Generally speaking, emerging nations where the tax haven industry makes up a sizable portion of the GDP experiences the most problematic issues. This could seem counterintuitive at first. The tax haven industry\'s significant contribution to the GNP should indicate the emergence of new, desirable economic activity. However, the nature of tax haven activities is the issue. Since tax avoidance is the primary goal of tax haven activity, relatively little money is invested in physical assets; as a result, the tax haven industry is very unstable and volatile. The financial sector is the only one in the tax haven industry that really conducts real economic activity, and it is highly dependent on what goes on in the other sectors. If this foreign company ceases operations, there won\'t be enough domestic activity to support the numerous banks, insurance providers, and other businesses that make up a country\'s financial industry. A tax haven nation\'s financial sector, which consists of several banks, insurance providers, and other businesses, would not be able to be sustained by domestic activity if this foreign firm were to collapse. Developments in the United States and abroad have a significant impact on tax haven activities. The smallest hint of a financial disaster, like a well-known bank missing payments, can cause investors to flee a tax haven nation in want of one with greater protection. These kinds of situations are hard to avoid due to complete secrecy and no government intervention are two features that investors seek in tax havens. Bank failures and other financial issues are not surprising because secrecy and supervision do not mix well, and the latter typically suffers in tax haven nations. Suspicion that the leaders of a nation are contemplating significant changes, such as nationalisation or other drastic measures, is another scenario that could scare off investors. Withdrawal of depositors and other investors could be triggered by the first hint of this. A government in a tax haven must also exercise caution when implying that it might alter its tax laws in order to satisfy requests for money, as this could cause the tax haven industry to become unstable. This makes it extremely difficult to formulate a cogent domestic tax policy because authorities are naturally reluctant to imperil the tax haven industry by making any essential adjustments to the tax code. In conclusion, Jamaica could benefit from an increase in development of the economy if it were to become a Tax Haven. That is, international businesses would opt to open subsidiaries in Jamaica, leading to an increase in employment. Question 5: =========== Discuss what is meant by automatic exchange of information for International Tax. --------------------------------------------------------------------------------- Automatic exchange of information (AEOI), is the systematic sharing of information between nations without the recipient nation\'s expressed permission. Local tax authorities can evaluate and collect taxes owed on income and capital held by their inhabitants abroad through the Automatic Exchange of Information (European Commission, 2014). Under this arrangement, Member States compile information on revenue that non-residents make while on their soil. Subsequently, they immediately forward this information to the relevant authorities in the Member State of the individual\'s residency, so that the relevant taxes can be applied. The goal of AEOI is to lessen international tax evasion, tax fraud, and tax avoidance. The data obtained through AEOI is solely utilised for tax purposes. What are the main benefits and challenges of automatic exchange for the Caribbean? ---------------------------------------------------------------------------------- Over time, technological advancements have not only made our world more interconnected but have also led to a rise in capital mobility. You can transfer money from Curaçao to Hong Kong or even deposit money into a Swiss savings account from the United States with simply a push of a button. Our world has become \"smaller\" and more efficient due to mobility, but it has also made it simpler for taxpayers to avoid paying taxes. A taxpayer would be more likely to create a deposit account in a foreign country where there is a lower tax rate on interest than their own country. If the foreign nation has bank secrecy regulations in place, preventing the banks from disclosing the taxpayer\'s bank information to his home nation, then this motivation is further enhanced. The lack of knowledge about the existence of these bank accounts makes it nearly impossible for the home nation to tax its citizens\' foreign deposits and international income. Through the automatic exchange of information, nations can more effectively tax their citizens and raise their revenue (Montesant, 2016). Although this is accurate, it also suggests significant expenses for the nations. These expenses can be broadly categorised into two groups: the expenditures associated with compliance and the income loss. Financial institutions will bear the majority of the costs related to compliance because of the massive amount of due diligence that needs to be undertaken and the IT frameworks that must be put in place to complete this task. Second, fewer foreign investment will result from the revenue loss, particularly in nations that are appealing because of their bank secrecy regulations (Montesant, 2016). This will have a significant effect on capital importing nations like the Bahamas, Bermuda, the Netherlands Antilles, and the Cayman Islands, Even though it might not apply to those that export capital. The financial industry plays a major role in the economies of some of these islands. Therefore, the costs of this automated information exchange may outweigh the benefits. Regardless, non-compliance could result in a nation gaining "tax haven" status in tandem with a bad reputation, which would put pressure on its government either way. Question 6: =========== Explain what is meant by the general anti-avoidance rule. --------------------------------------------------------- The General Anti-Avoidance Rule (GAAR) is enacted by the tax authorities in a country to fight against the avoidance perceived by the said rule. GAAR is a set of broad and principles-based rules in the tax code (Nakayam, 2013, p. 4). Tax avoidance is the ability to engage in schemes with the specific intent to avoid or reduce one's tax liability based on his/her earnings. The aim of tax avoidance is to pay little or no tax to the tax authorities (the government). What the GAAR essentially allows is for the revenue dept of the Government to apply the principle against the intent of the taxpayer to determine if avoidance is the outcome. The results will then determine whether or not to apply GAAR to counter and collect the "right" amount of tax payable on the taxpayers earnings (Nakayama, 2013, p. 7-20). Tax evasion is still a hot topic in the world, and there is widespread support for changing the tax code on all fronts. Generally speaking, a GAAR is intended to invalidate otherwise legal actions that are discovered to be carried out in a way that compromises the goals of the tax code, such as when a taxpayer has exploited or misapplied the law. However, the goal of stopping improper tax evasion may complicate a GAAR\'s legal structure in and of itself. This is simply because the phrase "tax avoidance" means different things to different people. Regardless of the structure of a GAAR, it should implement a policy aimed at dismantling obvious, fabricated, or manipulated tax-driven arrangements. Nonetheless, the GAAR ought to be created and implemented (Waerzeggers & Hillier, 2016). Subsequently, GAAR is a provision of last resort that is capable of being invoked by a tax authority to strike down unacceptable tax evasion techniques that would otherwise comply with the language and statutory interpretation of the regular tax law. Generally speaking, a GAAR is intended to invalidate otherwise legal actions that are discovered to be carried out in a way that compromises the goals of the tax code, such as when a taxpayer has exploited or misapplied the law. This is usually accomplished by granting the tax authority the power to revoke a certain tax benefit or impose an alternative. This may result in higher tax obligation on the taxpayer in situations where the taxpayer\'s course of conduct is so obvious, fabricated, or manipulated (Waerzeggers & Hillier, 2016). State what impact this could have on Jamaica's tax system if implemented. ------------------------------------------------------------------------- Legally there are numerous ways to reduce tax liability. However, it is illegal to evade taxes. As such, many companies employ or utilise the options available to do just that-avoid, but where they get in trouble is by way of schemes that evade paying the right amount of taxes owed and of course trouble ensues. Implementing a GAAR principle in Jamaica, I believe, would have the positive effect of countering tax avoidance or evasion, however, as with any new rule or law, the legislature would have to be strengthened to allow it to penalise the offenders with a view to deter avoidance and encourage those looking on, or those not compliant to become complaint and do the right thing, which for all intents and purposes is to enhance the Government's tax revenues which will allow it to meet its own financial obligations to nation building and meeting its own expenses. Essentially, government spending flows directly back to the economy through salaries, capital spending, debt payments, pensions, grants just to name a few. Once revenue is flowing back to the citizens, then more is available for spending, the result of which is increased buying power for the average citizen and the cycle continues. Question 7: =========== What roles do FATCA and OECD play in international Tax? ------------------------------------------------------- FATCA "Foreign Account Tax Compliance Act" is a financial disclosure and transparency regulation intended to assist the United States government in combating tax evasion by American taxpayers with investments in offshore accounts. FATCA has since become a model for global efforts to reduce tax evasion and increase financial transparency (FATCA, 2017). The roles of FATCA would include the following. Information Reporting: Through heightened due diligence checks, Financial Institutions (FIs) must identify their U.S. accounts under FATCA and report them on a regular basis to the Internal Revenue Service (IRS). In the case of an Inter-Governmental Agreement (IGA), the report is made to the relevant government body. International criteria for Compliance: It encourages international cooperation in tax compliance and information exchange by creating an incentive for countries to adopt similar legislation. Penalties for Noncompliance: FATCA has gone ahead to enforce compliance with its rules through heavy fines against non compliant FFIs. As a worldwide standard-setter and consensus-builder, the OECD (Organisation for Economic Cooperation and Development) works to combat tax evasion and avoidance. It has helped to get rid of bank secrecy for tax reasons by working to improve tax openness and information sharing amongst tax administrations ("Tax Transparency and International Cooperation"). The roles of OECD are: BEPS Project: The OECD\'s Base Erosion and Profit Shifting effort attempts to view equitable taxation as a tactic by which multinational corporations shift their profits to low- or no-tax countries. Standard Setting: It involves the development of standards and guidelines on matters relating to tax policy, such as the Common Reporting Standard-CRS, which enables the automatic exchange of tax information between countries. Coordination of Tax Policies: This would ultimately create a situation where the member countries would begin to collaborate on the harmonisation of tax laws to control the evasion and avoidance of taxes. This is in the interest of fair play for equality in the international taxation system. What benefits could Jamaica's tax system gain from being a part of FATCA and OECD? ---------------------------------------------------------------------------------- Engagement with FATCA and the OECD will serve to advance better tax governance, higher levels of compliance, and more broadly, a sounder economy for Jamaica. 1. Increased Compliance: With the IGA in place, Jamaica reinforces its tax compliance system to better prevent tax evasion and ensure the fulfilment of tax obligations. 2. Increased Revenue: The tax treaty provides the ability to exchange information that results in better tax collection, as the government will have access to data that may have been hidden. 3. Attracting Foreign Investment: Showing a path of meeting international norms and becoming transparent, it reflects that Jamaica is in a position to attract more foreign investment for higher economic growth. 4. Modernization of Tax Administration: The coming of FATCA into effect will modernise Jamaica\'s tax administration system in such a way that it promotes efficiency and smooth processes " Jamaica Gleaner, 2013".