Caribbean 360 is reporting that a new U.S. IRS law could negatively impact the Caribbean tourism industry. According to the Nassau Guardian, the Bahamas Hotel and Tourism Association (BHTA) has brought to the urgent attention of the Caribbean Hotel and Tourism Association the fact that US credit card companies have been mandated to implement an automatic 28% withholding fee unless the merchant receiving the payment is compliant with new Inland Revenue Service (IRS) regulations. This means that credit card processing companies must collect and verify the tax identification number (TIN) and legal name associated with that number for each merchant customer. If there is a discrepancy, then the 28% withholding fee goes into effect. This makes now more than ever a critical time for people to understand and get the cra refund, if they are eligible.
Without it, there will be massive potential knock-on effects on other economies due to the defecit in funds. If this happens, then hotels and restaurants that rely primarily on American tourists could face cash flow problems, not to mention the cost of compliant with the new tax code. This means that many people are looking at this change in the law with a worried eye. Currently, American Express is the only credit card company enforcing the new law which went into effect January of 2012.
Read more at Caribbean 360.