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Industry ministry forgets to allocate funds to offshore centre

Published:Wednesday | May 16, 2012 | 12:00 AM

Sabrina Gordon, Business Reporter

Jamaica's plans for an offshore financial centre appear to have been sidelined in this year's budget, but Government officials say the zero dollars allocated to the project was an 'administrative oversight'.

The project was transferred from the Ministry of Finance to the Ministry of Industry, Investment and Commerce, and appeared to have been overlooked in the drafting of the latter ministry's spending plans.

On Tuesday, Reginald Budhan, the industry ministry's permanent secretary, said in response to questions raised by Wednesday Business that the two ministries were considering how to "cut and carve and amend" the Estimates of Expenditure for the 2012-2013 fiscal year to find funds for the so-called Jamaica International Financial Services Centre (JIFSC).

In fiscal year ending March 2011, the JIFSC was allocated J$8.75 million; at year ending March 2012, it was initially allocated J$69.99 million, but ended up receiving just J$949,000. This year, no funds were set aside.

"It was an administrative oversight; JIFSC was under capital expenditure in the Ministry of Finance, but then with the supplementary budget in September, it was transferred to Ministry of Industry, Investment and Commerce, and because it was not one of the normal agencies it was left off the list," said Budhan.

"They had sent in their budget but we did not notice, and so now we are trying to see how we can sort it out with the Ministry of Finance," Budhan explained.

The allocation for JIFSC has been treated as a capital expenditure. But Budhan said it will now be classified as a recurrent item.

Finding funding

He pledged that funding would be found.

"There will be an allocation because it's an important project, but we don't know how much," he said.

Eric Crawford, who currently heads the committee set up to guide the creation of the JIFSC, says he expects funds to be available and that the issue was being addressed, pointing Wednesday Business to Budhan for further comments.

Legislation to establish Jamaica as a low-tax centre for financial services, on which work began in 2007, was passed in Parliament in February 2011 under the Golding administration.

In February of this year, industry minister Anthony Hylton said was fully behind the plan to set up the centre, which has the potential to bring in between US$30 million and US$300 million, or J$2.6 billion to J$26 billion, in annual revenue for the government.

The JIFSC secretariat is housed within Jampro, an agency of the industry ministry.