Financial Secretary Office News

Financial Secretary Office News

National Consultation in preparation for the 22nd OCO Conference

The OCO Secretariat visited Cook Islands on 27-30 January, 2020 to undertake preparatory discussions with the Cook Islands Customs Service and their stakeholders regarding the forthcoming 22nd Annual OCO Conference. The OCO Annual Conference will be convened in Cook Islands on 20-23 July 2020 and will bring together 23 Heads of Customs Administration in the Pacific Region and international and regional partner organizations to discuss relevant customs issues, address regional challenges and strengthen cooperation between OCO members and key partner organizations.

"This year's conference is particularly important," said OCO Head of Secretariat, Mr. Richard Brennan. “Our Pacific Leaders have reaffirmed the need for strengthened collective actions to effectively manage the regional security environment and the OCO members are mandated and positioned at the borders to contribute to this regional aspiration. We are seeing emerging threats within the Customs environment, trade of counterfeit goods, illicit financial flows, trafficking of people, drugs and weapons and money laundering to name a few. The OCO Conference will provide the platform for discussions on how Customs can effectively work to secure our “Blue Pacific” through collaboration with our key partners. An equally important but new issue the Conference will be discussing is the promotion of gender equality within Customs.

“It has been 18 years since Cook Islands last hosted an OCO Conference and having it back here provides us with an opportunity not only to showcase the Cook Islands and our unique culture but also to reflect on how far the Organisation have come, added OCO Chairman, Mr. Xavier Mitchell, Comptroller of the Cook Island Customs Service. Cook Islands was the host of the first Customs Heads of Administration Regional Meeting (CHARM) in 1986. Although the Customs role since our beginning have remained the same, scope and the threats have broadened in the past three decades and therefore Customs administration need to be responsive to these global changes and challenges.”

For any further information on the 2020 OCO Conference please email info@ocosec.org

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Cook Islands Customs Service

04 February, 2020


Cook Islands Government Quarterly Financial Reports - September 2019

The Cook Islands Government (CIG) preliminary financial outcome for September 2019 quarter is now available.

Net Operating Balance and Fiscal Balance of General Government

September 2019 Quarter

Budget

(‘000)

Actual

(‘000)

Variance

(‘000)

Operating Revenue $49,381 $49,133 -$248
Operating Expenditure $46,721 $41,604 $5,117
Net Operating Balance $2,660 $7,529 $4,869
       
Add Depreciation $3,435 $2,482 $953
Less Capital Expenditure -$6,445 -$4,464 -$1,981
Fiscal Balance -$350 $5,547 $5,897

The net operating balance for the period ended 30 September 2019 was a surplus of $7.53 million, which represents $4.87 million higher compared to the surplus estimated for the quarter.

Fiscal Balance

The overall fiscal balance[1] however was $5.55 million and represents $5.90 million higher than the fiscal balance estimated for the quarter.

In addition to underspending in operating expenditure, spending on capital projects were also below budget estimates by $1.98 million in the first quarter, mainly due to scheduling of major projects especially projects administered by Cook Islands Investment Corporation (CIIC). These capital projects are forecasted to be implemented in the second half of the financial year.

Official Development Assistance

Official Development Assistance (ODA) was appropriated at the total value of $65.22 million in the 2019/20 Appropriation. This value includes the Core Sector Support Grant Funding Arrangement with New Zealand for Education, Health and Tourism.

The first quarter for the financial year 2019/20 reported a total spend of $2.21 million. The low spending for ODA in the first quarter of the financial year was a result of delays in ongoing negotiations on priorities and the design of individual grant funding agreements. Spending is expected to pick up as we progress towards the second half of the financial year.

Financial Position

Overall cash balance was $176.19 million and includes funds that are committed of $140.51 million. Committed funds relates to funds set aside for specific purposes which includes the Reserve Trust Fund, the Loan Repayment Fund (LRF), Stabilisation Account Disaster Response Trust and other Trust accounts.

Total Gross Debt was $96.33 million at the end of 30 September 2019. This represented actual disbursed loans only adjusted for debt service repayments. There are other loans that government has committed to but are yet to be drawn of $18.99 million. The undisbursed loans are made up of $13.95 million for the Disaster Recovery Management (DRM) loan, which is only triggered and drawn down in the event of a catastrophe, and $5.04 million for the Undersea Broadband Cable loan which is expected to be drawn in early 2020/21.

Net Debt was reported at $47.47 million at the end of the reporting period. Net debt adjusts the Gross Debt for the effect of the LRF held against those loans and the loans held on behalf of SOE’s.

(END)

 


Global Forum 10th Anniversary Plenary Meeting 26-27 November 2019

Recently Revenue Management Division of the Ministry of Finance & Economic Management participated at the OECD’s Global Forum Plenary Meeting on Transparency and Exchange of Information for Tax Purposes (the Global Forum).

Over 500 delegates from more than 140 jurisdictions, international organisations and regional groups attended. 40 delegations were represented at Ministerial level.                            

Representatives from the financial services sector, the academic community and the media also participated in the first day of the meeting. This reaffirmed the international community’s strong support for the tax transparency agenda and the work carried out by the Global Forum.

To mark the Global Forum’s 10-year anniversary, on the first meeting day Ministers and other high-level representatives recalled the progress made and the widespread impact the transparency agenda has had in fighting tax evasion and avoidance. Banking secrecy has been dismantled with close to 100 jurisdictions now automatically exchanging information on financial accounts each year. Through voluntary disclosure programmes and tax investigations, Global Forum members have already identified EUR 102 billion in additional revenues (tax, interest, and penalties).

The work of the Global Forum focuses on ensuring the effective implementation of the automatic exchange of financial account information (the AEOI Standard) and of the exchange of information on request (the EOIR Standard). The Cook Islands has successfully implemented both. Last year almost 90 jurisdictions automatically exchanged information on 47 million financial accounts worth approximately EUR 4.9 trillion. 2019 is the third year of exchanges under the AEOI Standard and 94 jurisdictions are now exchanging financial account information.

This year under the AEOI Standard, Revenue Management Division has provided 44 jurisdictions with financial account information relating to over 22,000 financial accounts. As such, a number of follow up requests are being made on an annual basis under the EOIR Standard.

This year for the first time, the Cook Islands received financial account information from 31 jurisdictions which related to over 2,500 financial accounts held worldwide. Finance Minister Mark Brown said “We did give people plenty of time in 2017 to declare their incomes held in overseas accounts. The AEOI systems that we are part of means you cannot hide your income, if everyone paid their share of tax then we could look at reducing tax rates and that is fair to everyone”. The Revenue Management Division’s Director Xavier Mitchell said “where relevant we are now exploring how best to use this information to ensure everyone pays their fair share of tax on their worldwide income in the Cook Islands”.

[End]

17 December 2019