WHOLESALE BANKING: EXPANDING THE NATIONAL ECONOMY
Another reason for lowering our corporate tax rate to 20 per cent is that the European Union (EU) countries are compelling jurisdictions, such as Antigua and Barbuda, not to have low tax rates for corporations, including banks, in the international financial sector.
The ABLP introduced the offshore sector in 1982. Since then, the international environment has changed dramatically. It is clear that the present model of international financial services will not survive because of the hostility of larger countries. It is now necessary to restructure the concept and purpose of the sector by making it part of the national financial landscape.
Indeed, the Commission of the EU has given jurisdictions, such as ours, a year in which to stop ring-fencing of our offshore sector. Therefore, the ABLP Government will amend the International Banking Act 2016 to introduce a new form of banking license under the Financial Services Regulatory Commission (FSRC) in association with the Eastern Caribbean Central Bank (ECCB).
The concept we will introduce is based on the model used in Singapore for “Wholesale Banking”. A Wholesale Bank will be licensed to conduct certain activities in local currency with citizens, but not compete with local retail banks by issuing savings accounts. However, it will pay the same rate of corporate tax as local corporations, i.e., 20 percent.
The Wholesale Bank will be able to offer non- interest-bearing current accounts in local currency and offer long-term interest-bearing fixed deposits. The scope of the new license will include the provision of services between banks, and services to organizations such as government entities/agencies, mortgage brokers, corporate clients, mid-sized companies, real estate developers and investors, international financial and foreign exchange services, trade finance businesses, institutional customers (such as pension funds) and investment services dealing with bonds, securities, commodities and digital assets.
This means that the amount of money for borrowing by the productive sectors of our economy will be enlarged, thus boosting economic activity, and the shortfall from lowering the corporate tax rate for local companies to 20 percent will be made up by the taxes paid by the Wholesale Banks.
INTRODUCING BLOCKCHAIN TECHNOLOGY TO MAKE OUR NATION COMPETITIVE
The new ABLP Government will introduce legislation to operate and regulate Blockchain Technology as an integral part of Vision 2023 and Beyond. This technology will leapfrog our nation into digital transactions of the 21st Century and ready us for the next.
The practical benefits of Blockchain Technology is that, for the first time, transfers of property, such as money, land, shares and ownership title, is guaranteed to be safe and secure because such transfers are recorded digitally and permanently and no one can challenge the legitimacy of the transfer. The benefits of this technology are immense.
As an example, its introduction will greatly assist our country to end de-risking and withdrawal of Correspondent Banking Relations from our financial institutions by global banks in the US and the UK, because Blockchain Technology will record every transaction digitally, permanently and openly, allowing for immediate tracking, giving greater comfort to all financial institutions.
Beyond this, the operation of Blockchain Technology will allow companies, banks and other financial institutions to offer services to the world for global transactions such as buying and selling shares in companies or on stock markets, and transferring ownership of assets.
Within Antigua and Barbuda, Blockchain Technology can also be used to accelerate the registration of land purchases and title; to pay taxes, including property taxes in a secure and recorded manner; and to pay bills in a transparent, traceable and indisputable ways.
The introduction and regulation of Blockchain Technology gives Antigua and Barbuda another platform to offer services globally and locally through companies located in our country that employ local people and contribute to the growth of the economy. We will be among the first of Caribbean countries to become globally competitive in the provision of Blockchain-based services.
ELECTRICITY: REDUCING THE COST TO BUSINESSES AND HOMES
Over the last four years, the ABLP Government tackled many of the challenges that impact electricity generation and delivery, including resolving the judgment debt claim, of $221 million to Antigua Power Company – a legacy of the UPP administration – already described in this Manifesto. Among the many actions taken was refurbishment of the 69 kVA grid network which has improved the reliability of service.
The issue now is to stabilise electricity supply and to do so at an affordable price.
Therefore, the ABLP Government will ensure that APUA expands the use of solar photovoltaic and wind energy plants will be expanded. This
will be combined with a wind and solar plant costing $40 million that will be commissioned in 2018 with financing already pledged by the Abu Dhabi Fund for Development. So, this is no pie-in-the-sky promise. This will help to bring down the cost of producing electricity and reduce the price of delivering it to the public.
APUA has already started a retrofitting project at a cost of $21.3 million that will provide better street lighting across Antigua and Barbuda. The project reflects the strategy of Vision 2023 and Beyond to decrease energy consumption in the public sector and to reduce carbon emissions. Currently, street lighting service consumes around 9,700 megawatt hours annually and represents
about 21 percent of the total electricity consumption of the Government.
Under this project, the APUA will be replacing 14,365 existing street lamps with LED lamps. Four hundred and fifty of these LED lamps will be installed in Barbuda. Again, this is no empty electioneering promise. The money is in place with $18.9 million being provided through the Caribbean Development Bank and $2.4 million from the Government.
Further, as part of Vision 2023 and Beyond, we will consider ways to reduce the fuel variation charge, to lower further the cost of electricity per kilowatt to businesses and to homes.