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DH | Law proposal envisions right to basic bank accounts for all

HomeEconomieFinanciele sectorDH | Law proposal envisions right to basic bank accounts for all

PHILIPSBURG–The much-anticipated law proposal championed by United People’s (UP) party leader and Member of Parliament Rolando Brison’s, advocating for the right to a basic current account for all residents was officially booked into Parliament on December 19, 2023.

If approved in its current form, the legislation would guarantee that every St. Maarten citizen can have access to a bank account for essential banking services and actively participate in digital payment transactions. Banks must provide such an account within just 10 business days.

Recognising the pivotal role of payment services in shaping a modern and socially inclusive economy, the law emphasises the right of consumers with a genuine interest to open a basic payment account with a payment service provider. Following consultations with the Parliament of St. Maarten and considering input from the Advisory Council, the governor of St. Maarten sanctioned the National Ordinance on Basic Payment Accounts.

The Explanatory Memorandum to the National Ordinance sheds light on the legislation’s background, emphasising its objective to enhance consumer access to digital payment services. Given the global shift toward a digital financial landscape, countries worldwide have committed to promoting financial inclusion as a key element of their national strategy. In alignment with this international development, the government of St. Maarten has set forth the goal of fostering a modern and socially inclusive economy, providing its population with ample opportunities to participate in economic development.

Recognising the importance of cashless payments and basic financial services in the digital age, the government identified the necessity of ensuring that all consumers, for various reasons, have access to payment accounts.

Brison told The Daily Herald he regretted that local banks did not take the initiative to be non-discriminatory on their own accord, but is happy about the work he had put into this legislation and the collaboration received from the Ministry of Finance and Central Bank of Curaçao and St. Maarten in vetting the legislation since he presented the first draft to the government in March 2022 by means of his basic bank account motion. He notes that the hardships faced by many in St Maarten in getting bank accounts should be a thing of the past now that this law compels the financial sector to consider all citizens and businesses as clients.

“This law is key to financial security for a significant part of the population,” Brison said, underscoring the critical role the legislation plays in dismantling barriers to financial services.

Brison further emphasised that while the enactment of this law is a monumental step towards financial inclusion, there is still more work for the government to do in ensuring an economy that is truly inclusive. Addressing the need for further progress, he said that to materialise the proposed Digital St. Maarten, online banking options should be widely available.

“This legislation is not just about providing access to a basic payment account; it’s about laying the groundwork for a more equitable and prosperous future for all citizens,” Brison said. He sees the law as a catalyst for broader economic inclusion, acknowledging the importance of the government’s ongoing efforts to create an inclusive economy that caters to the diverse needs of the community.

More local directors

Citing one additional amendment he will be presenting to the law, businesses that wish to enjoy the right to a basic bank account would be required to have a local director or be 51% owned by a local. “Foreigners wishing to do business in St. Maarten will have a huge incentive to hire local directors or have local shareholders. They could choose to have a local director and enjoy a bank account in 10 days, rather than managing or owning the business on their own and waiting many months for a regular account. I envision this creating hundreds and maybe eventually a few thousands of new high-paying director jobs for locals.”

Tax compliance

Brison is convinced that the National Ordinance regulating access to a basic bank account will result in more tax compliance. He said that for the past decade, “banks in St. Maarten have effectively frustrated tax compliance by refusing many citizens access to digital payment options.”

With this legislation, Brison envisions a shift in the landscape whereby increased access to basic banking services will naturally lead to a higher degree of tax compliance.

The link between financial inclusion and tax compliance is a crucial aspect of Brison’s vision for a more transparent and accountable financial system. By ensuring that citizens have access to digital payment options, the government aims to create an environment where financial transactions are conducted seamlessly and, in turn, facilitate better tax reporting and compliance.

As St. Maarten continues its journey towards financial inclusion, the interconnected nature of these initiatives becomes increasingly evident. The legislation not only breaks down barriers to banking, but also serves as a catalyst for broader economic improvements, including enhanced tax compliance.

Digital economy

Brison’s vision for a modern, financially inclusive St. Maarten aligns with the global trend towards digital transformation in the financial sector. The integration of online banking options is seen as a crucial step in ensuring that every citizen can seamlessly access and manage their financial affairs. By promoting the availability of online banking services, the government aims to empower individuals to participate fully in the digital economy.

As the government lays the foundation for a digitally competitive country, Brison’s remarks underscore the interconnectedness of financial inclusion and technological accessibility. In an era where digital transactions are becoming the norm, providing citizens with user-friendly online banking options becomes a vital component of ensuring comprehensive financial inclusion.

Brison reiterates that the National Ordinance on Basic Payment Accounts not only addresses the immediate need for basic financial services but also signals a broader commitment to an inclusive economy. His observations shed light on the dual role of legislation – as a corrective measure to ensure non-discrimination in the financial sector and as a catalyst for broader economic initiatives.

With the enactment of this landmark legislation, Brison said, the nation takes a significant stride towards a future where every citizen has equal access to financial opportunities and the tools to thrive in a digital economy.

The full text of the legislation can be found on the website of Parliament under National Ordinances:

www.sxmparliament.org

Bron: Daily Herald

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