Last year, income from Vanuatu’s various citizenship by investment programs represented 16% of government revenue, more than twice the figure projected in the 2017 budget. This year – if Q1 data is anything to go by – that share will reach 24%.
According to a report published in Vanuatu Business Review (VBR), the government’s CBI-related income for the first quarter of 2018 amounted to some VAV1,820.8 billion (about US$16 million), 350% more than budgeted by the Department of Finance and Treasury.
Should Vanuatu be able to sustain this upward trend throughout the year, it would mean an annual income from CBI of about VAV7.3 billion (US$64 million), equal to nearly a quarter of government revenue.
“It’s coming in so fast now that the Department [of Finance] quite literally cannot spend it fast enough,” reads the report.
“Every year since the country began selling passports, non-tax revenues [virtually all from CBI] have run roughshod over predictions. Every year, the government has taken the increase in stride and bumped its predictions for the following year”.
While the report notes that the passport programs have been instrumental in helping the government reduce its debt burden, it also points to areas of concern.
“Years after the first programme was instituted, the government of Vanuatu has yet to establish any clear policies around the process, its purpose, and who should be qualified to provide the service. Allegations are rife that connections matter more than qualifications when applying for agent status. And the fact that agents can subcontract the due diligence process to third parties who are not subject to any scrutiny at all is worrying to say the least,” the report cautions.