Revenues from citizenship sales is the single largest source of revenue in Vanuatu today. That’s the message of the latest financial report from the Department of Finance and Treasury.
The mid-year financial report reveals, “In 2018, revenue from the honorary citizenship programs overtook that of VAT for the first time.”
It adds, “The Government remains careful not to rely on the income stream from the honorary citizenship programs and is working on implementing the Tax Administration Act to make collection of tax revenue more efficient.”
During the first half of the year, income from the two citizenship schemes was 16% higher than in the first six months of 2018.
This comes at a time when spending is at an all-time high. Treasury figures show that spending has more than doubled since 2014, from VT 15.2 billion in 2014 to VT 33.4 billion in 2019, when the recent supplementary budget is included.
Government income is still galloping ahead of spending. “In 2018, revenue collections exceeded the budget target by 31.5 per cent.”
Numerous commenters on social media have been critical of the schemes, despite their obvious and oversized contribution to the economy. Some characterise the sale of citizenship as the sale of sovereignty itself, and say it should not happen at any price.
A recent ABC investigation revealed that several DSP agents were found to have professional or personal conflicts of interest at the time of their application, but were granted licenses nonetheless. Unsuccessful applicants complained that they could find no evidence of consistency or transparency in the selection process.
Some passport holders have had their citizenship revoked, following investigation by law enforcement and financial authorities.
Most famously six Chinese nationals, four of them Vanuatu citizens, were whisked out of the country without access to legal counsel or due process. They appear to have been involved in a multi-billion dollar cryptocurrency scam.
Sources have told the Daily Post that officials in another small Pacific nation are currently investigating alleged organised crime figures who entered their country using Vanuatu passports.
In an interview with the ABC, former President Ati George Sokomanu said that he is opposed to the sale of Vanuatu citizenship, but if it must be done, it should be directly administered by the government itself.
The overwhelming majority of citizenship applications come from China, and most Chinese applications come from Hong Kong. Passport-processing activity has already slowed as a result of ongoing unrest in the city. Michael Tien, a member of the Hong Kong legislative council, told an interviewer yesterday that if no resolution was found to the crisis within 10 days, the Government of China will intervene.
The Vanuatu Business Review will feature a more detailed analysis of the entire mid-year financial report on Saturday.