BVI Chief Minister Comments On State Of The Territory

by Amanda Banks, for LawAndTax-News.com, London

23 June 2005

Speaking last week, Chief Minister of the British Virgin Islands, Dr. Orlando Smith delivered the 2nd State of the Territory Address.

Dr Smith commenced by observing that:

"We have had to confront difficult realities – from changing international laws that have threatened our financial services industry to increased competition to our tourism industry from destinations around the region and around the world. Here at home we have contended with the challenge of putting our Territory’s fiscal house in order and putting in place policies and programmes to deliver for the people, grow the economy and secure our future."

"At the same time, we have also benefited from important opportunities. The relative stability of the global economy has allowed for the financial markets to continue to grow and thrive; improved international security has restored the confidence of travelers to vacation abroad despite the continued looming threat of terrorism; and, above all, here at home we have witnessed a remarkable surge of energy, creativity and optimism among the people of the BVI – from the public servants whose hard work and dedication allows the government to continue to work for the people, to the youth of the Territory who everyday are showing us all the vast potential that they possess."

He went on to add that: "Progress can be seen in the halls of Legislative Council where we have passed critical legislation from the BVI Business Companies Act which is strengthening and protecting our Financial Services Industry; to the Education Act which has given new direction and purpose to our educational system; to the new immigration policy which has finally brought order and fairness to the system for determining residency status."

With regard to developments in the financial services sector, the chief minister stated that:

"Over this past year, the BVI International Finance Centre has moved to the implementation of the Strategic Development Plan for the BVI Financial Services Sector. The Plan, which was developed through a unique partnership between representatives of the Government and business community, provides action points and recommendations for both Government and the private sector on the way forward, to ensure the sustainability of the financial services sector. This example of partnership and cooperation is the best way to ensure that the needs of the industry and the needs of the public are kept in line – and that all stakeholders have their voices heard."

Regarding taxation in the jurisdiction, he announced that:

"The EU Savings Directive represented a major challenge to our industry. Under the terms of this Directive, our old dual-taxation system under which international companies doing business here were taxed differently from local companies was no longer allowed."

"In order to meet this new challenge we have taken a number of critical steps including the passage of the new Payroll Tax. For the business community, the switch to the Payroll Tax has required a transition period but all evidence suggests that it is being managed well – and thanks to this step the Financial Services industry is now in full compliance with international regulation and continues to be a leader in international financial services."

"And importantly, under this new system the working people of the BVI have seen their taxes reduced significantly, leaving more money in their pockets to buy the things they and their families need."

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