IMF国际货币组织全球-Cook-Islands_Technical-Assistance-Report_37页_505kb

Summary of the Technical Assistance Report on Cook Islands' International Financial Services Industry

Core Content

This report, prepared by the International Monetary Fund (IMF) in June 2019, provides an analysis of the economic and revenue contributions of the international financial services industry in the Cook Islands. It was commissioned by the Ministry of Finance and Economic Management (MFEM) in response to concerns raised by the European Union (EU) regarding the Cook Islands' status as a non-cooperative jurisdiction. The report outlines the structure of the financial system, regulatory framework, and the economic impact of the international financial services sector.

Main Points

1. Financial System Overview

• The Cook Islands' financial system includes approximately 30 financial entities, such as domestic and international banks, insurers, captive insurers, trustee companies, and money-changing/remittance businesses.
• There is no central bank, and the New Zealand dollar is the legal tender.
• The Financial Supervisory Commission (FSC) oversees all financial institutions, including banks, insurers, and trustee companies.
• Capital Security Bank (CSB) is the only onshore bank used by Cook Islands trustee companies for international clients. It is itself an international company.

2. Financial Regulation and Supervision

• The FSC is the licensing authority and regulatory body for all financial institutions in the Cook Islands.
• The FSC administers various legislations, including:
  • Banking Act 2011 and its amendments
  • Insurance Act 2008 and its amendments
  • Trustee Companies Act 2014
  • International Companies Act 1981–82 and its amendments
  • Digital Registers Act 2011
  • Foundations Act 2012 and its amendments
• The FSC generates revenue primarily from registration and renewal fees, which account for 76–80% of its annual income.
• Crown appropriations were provided in 2014 and 2015 but are no longer part of the revenue mix.

3. International Financial Services Industry

• The industry was established in the 1980s and offers services such as corporate entity formation, trust services, and financial planning.
• Eight registered trustee companies are the main providers of international financial services.
• The industry is exempt from all taxes in the Cook Islands, which raises concerns about its sustainability and tax revenue contributions.
• International entities (companies, partnerships, trusts, etc.) are generally not allowed to trade in the Cook Islands and thus do not directly contribute to the local economy.

4. Economic Contributions

• The direct contribution to GDP comes from the activities of trustee companies, ship registry, FSC, and FSDA.
• Indirect contributions are made through:
  • Purchases of goods and services (e.g., electricity, accounting, telecommunications)
  • Business creation for other sectors (e.g., banking, captive insurance, business travel)
• From 2010 to 2017, the total GDP contribution of the international financial services industry fluctuated between 3.8% and 4.8%, with direct contributions increasing from NZ$12.5 million in 2010 to NZ$14.9 million in 2017.
• Indirect contributions remained flat, averaging around NZ$3.5 million annually, due to a decline in purchases of production inputs.

5. Revenue Contributions

• The industry contributes to government revenues, mainly through FSC fees.
• From 2010 to 2017, the industry contributed between 3.1% and 3.3% to tax collection, despite contributing 3.8% to 4.8% to GDP.
• Tax to GDP ratio for the industry dropped from 24% (2010–2014) to 19% (2016), due to lower reported profits and increased deductions.
• The FSC is self-funded through registration and renewal fees, and its revenue is not derived from government appropriations.

6. Net Impact of Losing the Industry

• If the international financial services industry were to disappear, it is estimated that:
  • GDP would decline by 2.1–2.6%
  • Annual revenue loss would be between NZ$3.5 and 4.1 million
  • Most employees would find alternative employment in other sectors, but at lower wages.
  • Only the most highly paid employees would leave the Cook Islands.

7. Challenges and Considerations

• The report includes assumptions and judgments, and some data may be overestimated.
• For example, FSC and ship registry activities are counted as part of the international financial services industry, even though they are not strictly financial services.
• The CSB is not included in direct GDP calculations to maintain confidentiality of data, which may lead to underestimation of the industry's contribution.
• Insufficient data exists to determine which costs have increased, affecting the accuracy of the tax to GDP ratio.

Key Information

• Total GDP contribution of the international financial services industry is estimated between 3.8% and 4.8% (2010–2017).
• Direct contributions have increased over time, while indirect contributions have remained relatively stable.
• Tax revenue from the industry is lower than GDP contribution, with a tax to GDP ratio declining from 24% to 19%.
• The FSC is self-funded and generates the majority of its revenue from registration and renewal fees.
• The industry is at risk if taxes are introduced, as it could lead to revenue and economic losses.
• The FSDA is tasked with promoting and growing the industry, but most international entities are established for asset holding purposes.

Conclusion

The international financial services industry is a significant contributor to the Cook Islands' economy, both directly and indirectly. However, its tax exemption and lack of proportionate tax collection raise concerns about the sustainability of the industry and its long-term impact on the Cook Islands' fiscal health. Any move to tax international companies could have substantial economic and revenue consequences, necessitating careful consideration of the broader implications on the local workforce and related industries.