Category Archives: News and Events
The Vanuatu Chamber of Commerce and Industry (VCCI) position on Personal Income Tax (PIT) and Corporate Income Tax (CIT) is outlined in the report Vanuatu Revenue Review, Consultation Feedback of Vanuatu Chamber of Commerce and Industry of November 2016. This analytical study report was submitted formally to the National Revenue Review Committee in a letter dated 25 November 2016 addressed to the Chairman of National Revenue Review Committee, Ministry of Finance and Economic Management. A letter of reminder on this matter was forwarded to the Chairman of National Revenue Review Committee on 1 March 2017. So far, VCCI has not yet received any reply in an official printed written format to its submission. The content of VCCI letter of 25 November 2016 is as follows.
“On behalf of the Vanuatu Chamber of Commerce members and particularly those who work in the International Financial Centre industry, we urge you to re-evaluate the proposed introduction of Personal and Corporate income Tax in Vanuatu. Proposed tax reforms would be absolutely detrimental to the Offshore Financial Centre (OFC) which plays a key role in attracting international businesses and foreign funds to Vanuatu. The financial sector is an essential part of our economy and contributes between two and three percentage points to GDP, providing stable income for a small with limited opportunities. With an active and competitive policy towards international business, tourism, real estate and several other field of investments, it nicely benefits GDP growth. There has been substantial benefits to the nations who have understood and supported the growth of their nation’s Financial Centre, their populations benefiting in a number of ways. We would therefore like to suggest alternative options for the tax reform which are better suited for Vanuatu.
Starting from 2018, Vanuatu will have to exchange information following the CRS (Common Reporting Standard). Each country will annually automatically exchange with the other country the below information:
- the name, address, Taxpayer Identification Number (TIN) and date and place of birth of each Reportable Person:
- the account number;
- the name and identifying number of the Reporting Financial Institution;
- the account balance or value as of the end of the relevant calendar or, if the account was closed during such year or period, the closure of the account.
Currently, Vanuatu is note able to share these details with OECD countries as such information is not being collected. While Vanuatu, like all other nations, has committed to participate, it does not have an income Tax Office and therefore does not have the means to collect such information from its own and foreign citizens residing in the country.
The OECD countries are well-aware of the current financial situation in Vanuatu, including the Volumes of Swift Transfers, currency movements, and inflows and outflows, as all of this is closely monitored by First World Countries. The volumes are relatively low and well within the expected range given the size of Vanuatu economy.
Global agenda of OECD countries
By implementing CRS globally, First World Countries aim to avoid a potential future situation where someone could use Vanuatu to transfer or hold funds. It has become the mission of OECD countries to convince Vanuatu Government that it must set up an Income Tax Office and start collecting and sharing the information with other nations, as intended by the CRS.
The decision to implement Income Taxation in Vanuatu is therefore not made independently, but is primarily guided by First World Countries. For instance, the goal of Australia is to implement Taxpayer identification Number system in Vanuatu and start collecting the data in order to share it annually to avoid any potential asset and wealth transfer from Australia (or any other OECD nation) to Vanuatu after 2018.
First World Countries do not want Vanuatu to benefit and are not concerned about Vanuatu wealth, our nation’s future and the interests of our people. The entire Vanuatu tax reform is based on making CRS system work globally at the expense of our citizens. TINs would have to be issued to all Ni Vanuatu residents aged 18 or older (it will effectively be a Social Security Number). This means that Vanuatu will have to bear the massive costs of issuing around 200 thousand of these numbers, just so that – 10 thousand of them could be monitored by OECD countries.
Tax reform decisions should be made independently
Vanuatu Government should primarily take into account the interests of Vanuatu, just like the US Government is looking at US citizens’ interests first. Vanuatu is ready to cooperate and to work with other nations to be a good planet citizen and participate openly to fight corruption, money laundering, crime, terrorism – as long as this is not affecting negatively the people of Vanuatu.
Vanuatu must decide independently, for its own national interest if Corporate Income Tax (CIT) and Personal Income Tax (PIT) is a positive policy and the best way to raise money for public expenditure. This decision should note be dictated behind closed doors by our neighbours and by First World Countries which have their own agenda instead of Vanuatu interests at heart.
Vanuatu does not need CIT and PIT system to achieve compliance and transparency
We agree that Vanuatu and all its financial institutions must be FATCA compliant, in line with CRS-2018. We also agree that we should have measures in place to show that we are monitoring our economy and cash flows within the country. However, introduction of CIT and PIT is not necessary to achieve these goals. The two subjects are often wrongly mixed up, and this can be demonstrated by the fact that none of the 18 countries with no PIT are on the FATF list of high-risk and non-cooperative jurisdictions except Vanuatu:
|High-risk and non-cooperative jurisdictions:||Countries with no PIT:|
|AfghanistanBosnia and HerzegovinaDemocratic People’s Republic of Korea
Lao People’s Democratic Republic
British Virgin Islands
St. Kitts & Nevis
Turks and Caicos
United Arab Emirates
As shown in the table above, Vanuatu is not on FATF list based on its CIT or PIT legislation as it has nothing to do with it. Vanuatu will still be on the ‘grey list’ even after implementation of CIT and PIT as these subjects are not related.
Vanuatu has everything to lose and nothing to gain from introducing income taxes
The future of the Vanuatu Offshore Financial Centre is not clear. The offshore sector, directly and indirectly, represents a large share of economy, with around 5,000 registered institutions offering a wide range of offshore banking, investment, legal, accounting, insurance and trust company services. However, with the introduction of PIT and CIT, Vanuatu would lose its competitive position as a tax jurisdiction and the OFC could completely disappear. The OFC seems to be already written off by the Revenue Review committee without saying it out loud.
Bringing money from Offshore Financial Centre businesses positively contributes to our nation’s development as is not affecting the local economy while at the same time helps raise public revenues. While the taxes collected from the Offshore Financial Centre (OFC) businesses are relatively small and cannot be the main source of funding for our government, it would be irrational to completely dismiss them. In fact, modernizing the Offshore Financial Centre by following successful countries such as Cayman, Singapore, Hong Kong, BVI, Luxemburg, Belize, Jersey, Mauritius, Bermuda, etc. could bring a lot of additional revenues to the government from International Corporations, forex dealers, residency, and other sources.
There are a number of countries that are offering similar tax jurisdiction benefits to international businesses as it is wise to do so. It is a way to demonstrate a small nation’s independence and self-reliance as well as a tool to attract foreign investments and bring skilled talent who would otherwise not be there. Hundreds of expats living in Vanuatu are directly or indirectly related to the OFC. The setup has been in place in Vanuatu since 1970, and it should be protected and nurtured by the government. It should not be written off for nothing based on ideology of foreign advisers.
Vanuatu is currently one of the few countries that does not have formal TINs and does not collect income data on individuals and corporations. Within the next few years this could become a real asset for Vanuatu. This could help establish strong and unique strategic positioning as a tax jurisdiction by offering freedom and independence in a World which is closing down, and everything is becoming standardized and uniform. Such unique jurisdiction would help attract many new foreign investors in the coming years, potentially many more than we have seen previously.
Residential taxation VS Territorial taxation VS no personal income tax
Currently, Vanuatu is in the group of 18 countries and territories which do not impose Income taxation. On the other end of the spectrum, there is a large number of large and developed economies which have territorial Income taxation.
The proposition led by Australia specialists advocates for a tax regime that will directly move Vanuatu from one end of the spectrum to the other, without any consideration for our country size, tax jurisdiction positioning, and implications for the Offshore Financial Centre.
Residential taxation should not be considered
It is the current proposition to move Vanuatu from No Income Tax to the other end of the spectrum, by implementing a worldwide source tax (Residential taxation base).
If Vanuatu decides to implement Income tax, it should firstly move to a group of countries that tax only local income and not foreign income i.e. territorial taxation.
Territorial taxation is the “middle ground” between No Income Taxes and Residential taxation. It is implemented in a number of countries which are similar to Vanuatu: French Polynesia, Marshall Islands, Micronesia, Palau, Tuvalu, Singapore, Hong Kong, Seychelles and 25 others. Territorial taxation could one day be the first step to introduction of income taxes as it would not kill foreign investment and tax jurisdiction attractiveness overnight.
Conclusions and final recommendations
We strongly urge the Revenue Review Committee to reconsider Vanuatu tax system changes now proposed by foreign advisors.
The Vanuatu tax reform decisions are not being made independently – they are guided by First World Countries which do not have the interest of the Vanuatu nation as a priority. The reforms are not a good fit for our country and will negatively affect the people of Vanuatu.
We would like the Government to review alternative systems for raising public revenue. Modernizing the Offshore Financial Centre could help bring in additional public revenues. Together with other fiscal reforms such as raising VAT rate, reviewing business license and fees, and potentially introducing land value taxation, it would help bring the needed public revenues.
Strategy Labs of Europe has completed an independent study on Vanuatu taxation alternatives. It concludes that raising VAT to 17½% and other adjustments would raise more revenue than Income Tax and not scare off Foreign Direct Investment. This study can be downloaded from www.revenuereview.gov.vu Click on SUBMISSIONS then the first entry from the VCCI, which is entitled Vanuatu Revenue Review Feedback. Signed, Thomas Bayer, President of VCCI”
After struggling with the tropical cyclone Pam in 2015 and international airport runway infrastructure works in 2016, in 2017, all existing local businesses are currently planning an exit strategy to restructure their businesses with reduced employment, relocate overseas, or close down the business operations and cease to exist, to anticipate the negative impacts the introduction of Personal Income Tax and Corporate Income Tax would cause to the economy of Vanuatu. At the 5th Australia-Vanuatu Business Forum in Port Vila on 28 February 2017, it was anticipated that Foreign Direct Investment (FDI) trends in Vanuatu would drop following the introduction of Personal Income Tax and Corporate Income Tax in Vanuatu. It is also anticipated that goods and services’ prices would sharply increase to cover the costs of personal income tax and corporate income tax.
If Vanuatu is not yet ready for the introduction of Personal Income Tax and Corporate Income Tax to be paid by only 10,000 people out of a population of more than 280,000 people, what would be the options left for Vanuatu to pay for its national expenditure?
Vanuatu is to look for and focus on alternative tax options and strengthening its systemic commitment to free markets, friendly regulatory systems and very strong rule of law to finance its education, health, security, infrastructure development, foreign affairs, national debt, area council and provinces.
Vanuatu’s competitive advantage is to develop its economy, education, health, security, infrastructure development, foreign affairs, area councils and provinces, and pay its national debt by choosing this innovative step forward of no income tax, compared to regional Pacific Island countries.
HC Da Rin (4th from right) with WEAV members and ITC design team during training at the VCCI
Australian High Commissioner Da Rin paid a visit to the hat weavers trained by International Trade Centre (ITC) international consultants and design team in Port Vila. VCCI has been hosting several sessions of training offered by ITC to the women in handicraft affiliated with Women’s Export Association Vanuatu (WEAV).
The hats are made for export to create income for the weavers who need to supplement their family budgets for school and health fees.
“These hats are beautiful and the world must know about them and the creative skills of the Vanuatu mothers who make them”, said Torek Farhadi, senior adviser at the Geneva based International Trade Centre, an agency of the United Nations (UN). The project is financed by the Australian Department of Foreign Affairs and Trade (DFAT) as part of a Pacific Women Economic Empowerment Programme.
Empowering women through highlighting and offering their creativity and products in global markets create a new stream of income for Vanuatu through exports. It also encourages potential tourists who see these hats in high end stores abroad to visit this beautiful country and meet the weavers in person. “In the future WEAV can also offer weaving classes to visiting tourists” said Farhadi.
“Vanuatu’s handicraft is too beautiful to be overlooked” said Farhadi. With this training, we have seen that younger and older generations learning new techniques. “The mothers make the hats and the younger generation is already thinking how to market them on line”, said Serah Tari, WEAV coordinator.
High Commissioner Da Rin congratulated the Mothers for their fine work and said she looks forward to purchasing her Vanuatu hat from a store in Australia soon.
1 MONTH AFTER PAM CALL TO ALL BUSINESS OPERATORS
- To learn what remains to be done and what priority.
- Your voice is needed and will help rebuild the country
PUBLIC MEETING for ALL BUSINESS OPERATORS on Economy Recovery
Monday 13 April 2015
at 5.30pm at Reserve Bank of Vanuatu
Make sure you attend the meeting
Contact Vanuatu Chamber of Commerce & Industry
Mob: 71 23 967
As every year, Vanuatu Chamber of Commerce and Industry is organising the WIK BLO VANUATU in New Caledonia.
This years’ event will occur exclusively in “La place des cocotiers” from 13 to 15 November 2014.
You can also click in the following link to find out what’s new in Vanuatu:Les Nouvelles Vanuatu 2014
May 1 is Labour Day, a public holiday held in honour of all working people. In recognition of Labour Day the Vanuatu Chamber of Commerce and Industry has pre-launched parts of the VCCI Employers’ Guidebook on its website. The development of the VCCI Employers’ Guidebook is part of its ongoing commitment to building a decent work environment in Vanuatu, which will help both businesses and employees. It is being produced with the assistance of the International Labour Organisation Regional Office for Asia and the Pacific and the ILO’s Bureau for Employer Activities.
In the foreword to the Employers’ Guidebook Deborah France-Massin, Director of the ILO’s Bureau for Employer Activities, says, “Building positive employment relations is key to harmonious industrial relations as well as business success. If employers have a firm understanding of national employment relationship laws, they will be able to make good business decisions and reduce the risk of problems ending up in mediation or in court, where employers may incur additional costs for advisors, litigation and settlement. Hence, it is critical for employers to start the employment relationship off on a sound footing by gaining practical knowledge on the information and systems that should be established as the employment relationship begins and ends.”
Astrid Boulekone, General Manager of the VCCI, said, “The VCCI is happy to be able to show its support for decent work in Vanuatu on Labour Day by pre-launching parts of the Employers’ Guidebook. The VCCI developed this after a members’ survey in 2013 showed that VCCI members wanted more information on employment law and practice. It provides much-needed support to businesses.”
The pre-launched sections of the VCCI Employers’ Guidebook can be found at http://vcci.com.vu/resources/employer-guidebook/. The full launch will be happening in late May.
The Pacific Business Mentor Programme, PBMP, has been successfully established in all countries Cook Islands, Tonga, Samoa, Solomon Islands, Papua New Guinea, Vanuatu, Fiji, Kiribati and Tuvalu since 2010 up to 2013 with the objective of enhancing the impact of the mentoring activities by helping business owners develop their skills in operating a business successfully.
This programme fully funded by NZAid is coordinated in Vanuatu by the Chamber of Commerce and Industry. A team of professional business mentors and business trainers visit four times Vanuatu every year to meet with the recipients of the programme.
More than 90 local businesses of Vanuatu have benefited from this programme and are currently the recipients of the Pacific Business Mentoring Programme in Port Vila and Luganville.
If you know any local businesses which would benefit from such programme, please advise these local businesses to contact VCCI at firstname.lastname@example.org or to come to see Astrid Boulekone at VCCI for any further information.
You are welcome to submit now by return email your complete application form as a scanned copy which will be forwarded to the Pacific Business Mentoring Programme New Zealand (PBMP) headquarters in Auckland.
You will also give the original complete application form at the Reception of VCCI office in Port Vila.
Pacific Business Mentoring Programme (PBMP) in New Zealand will advise you of the outcome of your application by email soon.
A confirmed recipient of PBMP will receive free of charge the visit of his or her Business Mentor from New Zealand twice a year and will also be able to attend a Business Training Workshop provided by Business Trainers from New Zealand twice a year.
PBMP Business mentors from New Zealand will visit Vanuatu soon from 3rd to 7th March 2014.
You may also check the website of Business Mentoring at www.businessmentorspacific.
You may access this link for Business Mentoring application shortly.
The organisation of the annual Wik Blong Vanuatu Trade Fair in Noumea, New Caledonia since 2007 has experienced a greater success particularly with a high record number of visitors every year with 10 000 visitors in 2007, more than 12 000 visitors in 2008, 14 000 visitors in 2009 and 20 270 visitors in 2010, 19 145 visitors in 2011, and 20 400 visitors in 2012. (Source: Noumea Centre Ville, Maison des Artisans
This year, Vanuatu Chamber of Commerce and Industry and Southern Province of New Caledonia under the joint agreement with the governments of Vanuatu and New Caledonia wish to carry out again this event Week of Vanuatu, « Wik Blong Vanuatu », 7th Edition, during the week from 6th to 10th November 2013.
The organisation of an evening meeting with potential New Caledonian investors on Wednesday 6th November 2013 at Complex Nouvata Parc from 6.30pm to 8.30pm would allow the set up of a solid basis for a favourable business environment in the private sector of both countries.
This evening will be organised around the following theme: « Vanuatu Economy New Developments »
In this respect, there will be a testimonial session covering the experiences of successful investments.
Vanuatu Chamber of Commerce and Industry in collaboration with the official authorities of New Caledonia wishes to invite you take advantage of the success of this new cooperation to intensify economic synergies between Vanuatu and New Caledonia.
Nearly 140 guests, businessmen and businesswomen of New Caledonia, participated to the Investment Information Meeting on Wednesday 7th November 2012 in the evening at the hotel Ramada, Noumea.
The 8 local companies that attended the Investment Information Meeting in 2012 are as follows:
- AJC: Assistance Juridique, Comptabilité, Conseil
- ANZ Bank
- Bred Bank
- Caillard & Kaddour
- First National Real Estate
- Law Partners
- Pacific Private Bank
- Telecom Vanuatu Limited
The 3 local companies that participated in the financing without attending the Investment Information Meeting in 2012 are as follows:
- Colorite Graphics
- IPV Printers Ltd
- Pierre Brunet Entreprise Générale
This year, we wish to renew this initiative which has experienced a great success with the Caledonian public. Nearly 100 people are expected for the Investors Meeting Evening which includes an interactive presentation on Vanuatu Economy New Developments followed by a cocktail on Wednesday 6th November 2013 from 18h30 to 20h30 at the Complex Nouvata Parc, Noumea.
The 5 local companies who will attend the Investment Information Meeting in 2013 are as follows:
1. AJC: Assistance Juridique, Comptabilité, Conseil
2. Caillard & Kaddour
3. First National Real Estate
4. Law Partners
5. Telecom Vanuatu Limited
The 2 local companies that will participate in the financing without attending the Investment Information Meeting in 2013 are as follows:
1. Colorite Graphics
2. IPV Printers Ltd
Local companies that have provided donations to CCI – Wik blong Vanuatu in 2013 are as follows:
- ANZ Bank
- Vanuatu Brewing Limited
For more information, please contact Mrs. Astrid Boulekone by email email@example.com or on mobile number 00 678 77 53 906 or 00 678 27 543 in Port Vila, Vanuatu.
For more information, please contact Mrs. Jennyfer Jurion by email firstname.lastname@example.org or on mobile number 00 687 75 26 16 in Noumea, New Caledonia.
Programme for Week of Vanuatu – Wik blong Vanuatu 2013 in Noumea from 6th to 10th November 2013
|Wednesday 06.11.13||Thursday 07.11.13||Friday 08.11.13||Saturday 09.11.13||Sunday 10.11.13|
|From 07H30 to 20H30||From 6H00 to 19H00||From 11H to 18H||From 9H to 18H||From 9H to 17H|
|Opening of location site of Jeudis/ ThursdaysFor products deliveryChecking of productsStarting from 09H
|Setting up of bootsJeudi/ Thursday of VanuatuFrom 6H to 10H||Opening of location siteHouse of CraftmenFor products deliverySetting up of boots
From 8H to 11H
|Opening of location siteHouse of CraftmenStarting from 8H||Opening of location siteHouse of CraftmenStarting from 8H|
|Customary CeremonyThursday of VanuatuFrom 10H to 10H15||Opening CeremonyVanuatu Trade FairFrom 11H to 11H15||Vanuatu Trade Fair Entertainment House of CraftmenFrom 9H to18H||Vanuatu Trade Fair Entertainment House of CraftmenFrom 9H to 17H|
|Jeudi/ Thursday of VanuatuEntertainment Place des CocotiersFrom 10H to 19H
|Opening of Vanuatu Trade Fair EntertainmentHouse of CraftmenFrom 11H to 18H|
|Vanuatu – New Caledonia Investment Information Evening Complex Nouvata ParcFrom 18H30 to 20H30||Tourism PresentationTreking AmbrymContact 79 55 83CCI New Caledonia
From 18H to 19H
Emission TV : Temps de parole La semaine du Vanuatu en 2011
Du lundi au jeudi à 19h15.
Les échanges avec le Vanuatu
Après la 5e édition de la week blong Vanuatu, semaine de promotion de l’archipel voisin, gros plan sur les échanges économiques avec la Nouvelle-Calédonie. Parmi les secteurs prisés des investisseurs calédoniens, le tourisme mais aussi l’industrie de transformation ou encore l’immobilier. Nous évoquons également les dossiers qui sont en panne, à savoir l’aérien ou encore les échanges agricoles et en particulier les importations de tubercules en provenance du Vanuatu.
Invité : Paul de Montgolfier, consultant, aide juridique aux investisseurs.
Émission préparée et présentée par Frédérique Machoro-Siebecke
Rédacteur en chef : Patrick Durand-Gaillard
Durée : 6 min 37 s
Issue N° 3409 Saturday, November 26 2011