Front Matter Page
IMF Country Report No. 19/270
COOK ISLANDS
TECHNICAL ASSISTANCE REPORT—INTERNATIONAL FINANCIAL SERVICES INDUSTRY
This technical assistance report on Cook Islands was prepared by staff of the International Monetary Fund. It is based on the information available at the time it was completed in June 2019.
August 2019
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Front Matter Page
ASIA AND PACIFIC DEPARTMENT
COOK ISLANDS
International Financial Services Industry
Technical Assistance Report
June 2019
The contents of this report constitute technical assistance provided by the staff of the International Monetary Fund (IMF) to the authorities of the Cook Islands in response to their request for technical assistance. This report (in whole or in part) or summaries thereof may be disclosed by the IMF to IMF Executive Directors and members of their staff, as well as to other agencies or instrumentalities of the TA recipient, and upon their request, to World Bank staff and other technical assistance providers and development partners with legitimate interest, unless the TA recipient specifically objects to such disclosure (see Operational Guidelines for the Dissemination of Technical Assistance Information—http://www.imf.org/external/np/pp/eng/2013/061013.pdf). Publication and disclosure of this report (in whole or in part) or summaries thereof to parties outside the IMF other than agencies or instrumentalities of the TA recipient, World Bank staff, other technical assistance providers and development partners with legitimate interest shall require the explicit consent of the TA recipient and the IMF’s Asia and Pacific Department.
Contents
GLOSSARY
PREFACE
EXECUTIVE SUMMARY
BACKGROUND
COOK ISLANDS’ FINANCE SECTOR
A. Cook Islands’ Financial System
B. Financial Regulation and Supervision
C. International Financial Services Industry
MEASURING ECONOMIC ACTIVITY
CONTRIBUTION OF INTERNATIONAL FINANCIAL SERVICES TO GDP
A. Trustee Companies, Ship Registry, and FSC
B. FSDA
PURCHASES OF GOODS AND SERVICES
CONTRIBUTIONS TO OTHER SECTORS
A. Banking Services
B. Captive Insurance
C. Business Travel
TOTAL GDP CONTRIBUTION
CONTRIBUTION TO GOVERNMENT REVENUES
NET GDP AND REVENUE IMPACTS
FIGURES
1. Total Fleet by Flag of Registration and Dead Weight Tons
2. GDP of Trustee Companies, Ship Registry, and FSC and Exchange Rate
3. International Financial Services Industy: Number of Employees and Average Wage
4. Sales Exclusive of VAT and Company Income and Withholding Taxes
5. Average Wages in the Finance Sector
6. Distribution of Salaries and Wages in the Finance Sector in 2017
TABLES
1. Cook Islands’ Financial System
2. Financial Services Legislation
3. Revenues of the Financial Supervisory Commission
4. International Corporate Entities
5. Cook Islands: Vessel Registrations and Gross Tonnage
6. GDP and Top Five Largest Industries
7. GDP Contribution of the Trustee Companies, Ship Registry, and FSC
8. FSDA Appropriations
9. GDP Contribution of the FSDA
10. Composition of Goods and Services Purchased by Trustee Companies
11. Industries’ Value Added as Percent of Gross Turnover
12. GDP Contribution of International Financial Services Providers’ Purchases
13. Indirect GDP Contribution: Banking Services
14. Indirect GDP Contribution: Captive Insurance
15. Indirect GDP Contribution: Business Travel
16. Total GDP Contribution of International Financial Services
17. Other Government Revenues: Maritime Cook Islands and Financial Supervisory Commission
18. Tax Revenue: Trustee Companies, Ship Registry, FSC, and FSDA
19. Contributions of the International Financial Services Industry to Tax Revenues and GDP
20. Tax and Tax to GDP Ratio: International Financial Services Industry and Total Economy
21. Company Sales, Deductions, and Taxable Income
22. Total Tax Contribution of the International Financial Services Industry
23. Finance Sector: Number of Employees, Wages, and Average Wage by Wage Bracket in 2017
24. Estimated GDP Loss
25. Estimated Revenue Loss
Glossary
| BOP |
Balance of payments |
| EU |
European Union |
| GDP |
Gross domestic product |
| FSC |
Financial Supervisory Commission |
| FSDA |
Financial Services Development Authority |
| MFEM |
Ministry of Finance and Economic Management |
| IMF |
International Monetary Fund |
| PAYE |
Pay-as-you-earn |
| PFTAC |
Pacific Financial Technical Assistance Centre |
| SNA |
System of National Accounts |
| VAT |
Value added tax |
Preface
In response to a request from the Ministry of Finance and Economic Management (MFEM), I conducted a technical assistance mission to estimate the economic and revenue contributions of the international financial services industry in the Cook Islands. The mission took place in Rarotonga, Cook Islands during the period October 29 to November 9, 2018. This report contains the estimates.
Special thanks are due to Veia Teipo, Cook Islands Statistics Office, and David Toleafoa, Revenue Management Division, for compiling and providing data used in the analysis. I also benefitted from valuable discussions with Ria Arthur, Business Trade and Investment Board, Natalie Cooke, Economics Division, Andrew Forbes, Revenue Management Division, Tamatoa Jonassen, Financial Services Development Authority, Cheryl McCarthy, Financial Supervisory Commission, Xavier Mitchell, Revenue Management Division, Metua Robati, Business Trade and Investment Board, Alan Taylor, Financial Services Development Authority, and Louise Wittwer, Financial Supervisory Commission.
I would like to thank the staff of the Revenue Management Division for their hospitality.
The International Monetary Fund’s Statistics Department reviewed and provided helpful comments on this report.
