Jamaica makes headway on offshore centre
Published:Sunday | November 14, 2010 | 12:00 AM
Sabrina Gordon, Business Reporter
In September, Jamaica became a member of the Global Forum, an agency of the Organization for Economic Cooperation and Development (OECD), a move the Government said positions the country to push ahead with its plans for an offshore centre.
Global Forum deals with matters of transparency and exchange of information for tax purposes among member states.
The Jamaica International Financial Services Centre (JIFSC) is expected to be a low-tax services centre, in line with other jurisdictions that offer similar offshore services.
The OECD, a conglomeration of the world's richest countries, is a premier watchdog of tax havens.
"As an agency of the OECD, the Global Forum sets standards aimed at ensuring fiscal transparency, facilitates the exchange of tax information between states, and monitors compliance with them internationally, particularly by jurisdiction, which offers international financial services," said Eric Crawford, chairman of the JIFSC committee.
"Jamaica has recently joined the Forum because it enhances our credibility as a transparent jurisdiction that opens up itself to review among its peers so as to demonstrate that we adopt best practices in terms of the matters that are within the mandate of the Forum," he said.
In recent years, the OECD has been aggressive in policing offshore centres, blacklisting those jurisdictions that it deems accommodating of tax evaders or cheats.
Under the OECD standard, a tax haven is defined not as a jurisdiction that has a competitive tax rate, but one that refuses to provide information to foreign tax authorities. Information Minister Daryl Vaz said last week that Jamaica completed phase one of the Forum's review in September and would undergo a phase two assessment by 2013.
The Jamaica financial centre, when established, is expected to create about 1,500 jobs. Its other selling point is that it could pump more than US$500 million per annum into the local economy.
The JIFSC initiative is being guided by the committee led by Crawford and reports to Minister of Industry, Investment and Commerce Karl Samuda.
A bill to establish a statutory authority to complete the implementation of the centre is to be taken to Parliament shortly.
legislation
Crawford said a significant amount of research and due diligence had already taken place to determine opportunities, resources, and other requirements, which would guide the implementation process.
Arrangements have been made, he said, to fast-track the drafting and promulgation of legislation, which would form the framework of the centre.
While the financial regulatory infrastructure is substantially in place, said Crawford, institutional strengthening of the agencies is recognised as a precondition to the establishment of the centre.
Jamaica is expected to enter the offshore services market as a mid-value competitor, pursuing niche markets in areas such as entertainment and sports.