Revenue collected by BVIFSC drops by $10.8M so far — Premier
Premier Andrew Fahie
Revenues received by the state-owned BVI Financial Services Commission (BVIFSC) between January 1 and June 6 this year have dropped roughly 10 percent when compared to the same period last year.
Giving a breakdown of the figures in the House of Assembly on Friday, June 19, Premier and Minister of Finance Andrew Fahie said the decline is a result of the ongoing COVID-19 pandemic.
“The amounts would have significantly changed as we realise a $10,856,350.31 drop-off in 2020, thus far, in the same period in terms of 2019,” the Premier said.
“Everyone was shut down for COVID and most of the businesses for this territory was also affected because it was worldwide. So, no one could have maintained the same amount of money they were making anywhere in the world,” he further said.
Downward trend?
While the pandemic has been cited as the cause of the revenue fall-off this year, statistics from the Premier show that the BVIFSC’s revenue as been experiencing a downward trend since 2018.
The BVIFSC collected $116,655,032.02 between January 1 and June 6, 2018. That figure dropped to $110,403,066.34 for the same period last year and further dipped to $99,546,716.03 for the corresponding period this year.
The revenues received are broken down in five divisions of the FSC — the Registry of Corporate Affairs Division, the Banks & Judiciary Division, the Investment Business Division, the Insurance Division, and the Insolvency Division.
Encouraging signs
The Premier noted that the Corporate Affairs Division have seen the biggest loss in revenue so far. He, however, noted that there are early signs of a come for the local financial services sector.
“We are seeing signs with the industry that are very encouraging,” said Fahie, who noted that COVID-19 can still cause things to change again.
He continued: “There are some other new areas that we’re going to be exploring and we’ll be coming to the House with some of the legislation that we feel will help this industry into a new direction which will allow for more revenues.”
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So the demise of the financial sector now becomes clear and is here. Wasn’t it this government and this Foy that at the beginning of the year he was touting an increase to the financial sector? This is going to get worse. Better open the Territory next month to tourists or you are all gonna die and not from the virus.
You are a true D–K H–d: what country is not under trauma from COVID 9 economically. Look at the UK and what is happening to its economy. It is going for 70 000 dead and you have the gall to criticize leaders who have managed to keep the death rate close to zero? If anyone deserves to get a good dose of COVID 19 it is an a– H— like you
@To ahh
Last time I checked the UK had 181 billion dollars in reserves and what do we have? 70 Million. If you think that we have some Fairy tale Godmother waiting to wave her magic wand and cause to disappear all of our debt and recurrent expenses or grant us 2 billion dollars in relief well you picked up the wrong book.
The Premier said our revenues were down by 40% and now this. The sooner we realize the dire need to re-open the economy with reasonable protective measures against COVID-19 the better we maybe for it. September/October will be too late it must be July.
I am beginning to believe the Government has no plan to protect livelihoods. Anyone get a stimulus check yet? They now saying that the small business grant initiative is on hold indefinitely? What the France?
Poor mankind.
UK may have 181 Billion dollars in reserves but they are 2 Trillion dollars in debt. I don’t think BoJo ever had a plan to protect anyone but himself and his cronies. Please stop holding that criminal regime up as anything that we should aspire to be like. Tongue Fu? More like Tongue Fool.
He wants more reasons to feast on social security funds
I question whether the fall in revenue is Covid related (suggesting it will bounce back), or a more permanent fall related to economic substance and other global headwinds …
Economic substance may end up being a huge revenue booster in the short term. Many companies that had already chosen to close the company by not paying government license fees are now restoring to good standing to formally liquidate to avoid making any future substance filings.
No annual recurring revenues once liquidated.
If liquidations and struck offs are on high what are the rates of renewals pre 3 calendar years to Irma to date – i.e what does the licence fee renewal graph for the calendar years 2014 to May 2020 (on a monthly basis) look like?
What are the statistics for incorporations?
Is the people getting the facts? Is the truth being hidden?
Based on the above data and world economic conditions what do a 1 year projection in financial services revenue government collects look like.?
I wouldn’t request past a 1 year projection knowing I wouldn’t even get the data for the 1 year projection. A whole heap of hot air.
VIP government is a waste of the people’s time and money!! We demand penny for penny of the already bad spending of MY pension money. Food money, garbage collection and quarantine security. All talk and no action. More reasons for refusal of grants from the UK. With ALL our BS UK should just cut us loose.
How much did the registered agents get? It’s more than the govt does. Why does the govt not collect the fees directly and cut out the vast profits these companies make? And all of that profit is sent outside of the country. And not subjected to a 7% money export tax like poor peoples transfers are. There is plenty of money in the finance industry. Set up an on line system where the govt collects the annual fees directly and revenue would more than double. We have stupid little taxes like the 7% on transfers and tourist discouraging entry and exit taxes that could be abolished if we stopped these parasites from sending the money earned in BVI to fat cats in London and elsewhere.
Annual fee for BVI company $500, the government gets this
Typical registered agent fee for collecting the annual fee $750 -1000
The vast profits are sent outside the country
Registry / FSC income is pretty much directly linked on a straight line basis to the number of companies at the Registry. This is the single biggest challenge facing the BVI. Nobody is predicting anything other than a material fall in number of companies over the short, medium and long term. The latest numbers might have been impacted a little by COVID but dont kid yourself this is not part of a long term decline. There are some opportunities out of economic substance but it is not easy monney and wont go straight to the Government. The BVI Government has to find significnat alternative sources of income and/or cut its budget. Quickly.
This is a longstanding problem – the inability to diversify government revenues beyond incorporation fees. A serious rethink is needed if the BVI wants to remain competitive and still gain revenue from the industry in the new offshore world. But too much public sector change is still acting like it is 1999 in BVI.
$99M by 2 = $200M almost for the year 2020. With tourism out this year, that figure represents half of the Government annual $400M budget. What does that say?
This is just a travesty! For the past 10 years the financial services industry players have been crying for a shift in the business strategy being more ‘value-added services’. The last was SIBA and the additions to the money services act. The old model of mass incorporation ran dry in early 2000’s.
Too bad we are a reactive society and not a proactive society. Note that in pretty much all administrations both NDP or VIP no sitting member had/has intimate knowledge of our financial services industry. Rather they hire consultants that cares only about collecting their contractual fee!
This ain’t Covid19 related. It’s related to incorporation stats from 2019 and Q1 2020.
Also last year was boosted by registers of directors filings.
Long term BVI needs to think about taxing local businesses (including the self-employed). It’s like the oil situation – BVI stumbled on an unexpected boom but it is gradually decreasing or running out. We can’t rely on the rest of the world to pay the majority of govt revenue forever. We need to get like everyone else and pay our own way. NHI was a step towards that but realistically we should be looking at a tax on profits (say 10%) and on income (say increase from the current payroll tax and put the burdens on employees not businesses towards 20%).
Currently we live off an export industry (business companies) where there is little added value beyond the annual fee. Eg what’s the size of the legal market actually done in the BVI? $100m? What about the IPs? 30m/10m? Economic substance is not the magic bullet – the BVI needs to become a place where it is easy to invest and with a realistic prospect of status (which leads to investment). Discriminatory property taxes, no votes, barriers on setting up businesses, no certainty of status even if you do invest and stay for 20 years, all of these things result in the real wealth leaving the island. There is so much opportunity but without implementing the McKinsey recommendations the BVI just faces slow decline.