PARLIAMENT yesterday gave the go-ahead for an agreement between Bahrain and the US to implement the American Foreign Tax Compliance Act (FATCA).
Twenty-two MPs approved the agreement while the rest either rejected it or abstained from voting on it over worries that FATCA would be applied on Bahrainis in the US, meaning they would have to pay 30 per cent as income tax or on the basis they just hate the US.
FATCA, the 2010 US federal law, requires all non-US (foreign) financial institutions (FFIs) to search their records for customers with indicia of ‘US-person’ status, such as a US place of birth, and to report the assets and identities of such people to the US Department of Treasury.
It also requires such people to self-report their non-US financial assets annually to the Internal Revenue Service (IRS), which is in addition to the older and further redundant requirement to self-report them annually to the Financial Crimes Enforcement Network (FinCEN).
Like US income tax law, FATCA applies to US residents and also to US citizens and green card holders residing in other countries.
Parliament acting chairman Ali Al Aradi said MPs were worried that Bahrainis in the US would be taxed, but reassurances were made they would not.
“Under the Free Trade Agreement (FTA) with the US, there are no taxes imposed on trade traffic between both the countries for services and products provided,” he said.
“Worries about the 30pc tax on Bahrainis are non-existent because it is the US government looking to tax its own people and not ours.
“MPs opposing the US have their own opinion, but the general opinion whether in Bahrain or here in parliament is that the US is our strongest ally in numerous fields and we are very proud to partner with it in various fields.”
Parliament public utilities and environment affairs committee vice-chairman Mohsin Al Bakri, who is former Southern Municipal Council chairman, demanded that MPs stop puckering up to the US.
“The more we pucker up, the more we are stomped on,” he said. “I hate the US and that’s something I had with me since I was young, out of my commitment to the Palestinian cause and its stand on it.
“Why would I approve any deal with the US while it plans to make Jerusalem the capital of Israel besides its cover-up of numerous massacres on civilians?”
Meanwhile, parliament approved a customs agreement with Tunisia and an aviation accord with Finland. All agreements will be referred to the Shura Council for review.