Last year, the finance ministry put up $15 million to explore the possibility of transforming the Kingston waterfront into a ‘low’ tax haven zone.
But claiming the financial centre as a potential boost for jobs, and new prosperity within the core of the capital, the Ministry of Finance has now set aside $102.6 million from its capital budget for the project, seven times the amount spent last year.
“The IFSC will serve to provide financial services for clients outside of our jurisdiction and seeks to enhance job creation, diversification of the economic base, and real estate development,” said a note within the 2009/10 Estimates of Expenditure released Tuesday.
Jamaica has been pursuing the offshore centre plan for more than a year now, led by Senator Don Wehby who immediately commissioned a study on its feasibility and what was required to get the centre up and running.
The results of the Eric Crawford-led assessment were not released, but Wehby has indicated that Jamaica would be targeting certain niches in order to break into the market, including sports and entertainment.
A chief implementation officer is being recruited to head up roll out of the plans, which according to early reports include either a key role in or being head of a new company to be created by statute.
The worldwide offshore market – which includes regional countries like Cayman Islands, British Virgin Islands, Barbados and others – commands an estimated US$7 trillion of business annually, representing both individual and corporate wealth.
But the countries with membership in the Organisation of Economic Cooperation and Development (OECD) have long been suspicious of the secret veil under which they operate, saying their opaqueness allows their nationals to escape paying taxes at home.
The United States, for example, estimates that it loses US$100 billion per annum in unpaid taxes on wealth that Americans have shifted offshore.
Greater transparency
The OECD, following last week’s G20 Summit in London, released a ‘blacklist’ – on which four countries appear, including Costa Rica – demanding greater transparency in their operation.
On Tuesday, all four countries were off the list.
But there is also a ‘graylist’ and ‘whitelist’ of countries that could potentially impact 18 regional countries, including Barbados, Antigua, St Kitts and St Lucia.
The secretariat of the Jamaica IFSC is within the offices of Jamaica Trade and Invest, to which the $102.6 million budgeted for the project appears to be destined.
Wehby, a minister without portfolio in the Finance Ministry since 2007, quits the job at the end of July, which means responsibility for the project will shift to Finance Minister Audley Shaw.
