On June 1st, 2010, the Economic Development Authority hosted a Round-table dinner with EDA officials, EDC beneficiaries, and USVI dignitaries, such as Senator Hill and the First Lady Cecile de Jongh. Of interest was the information provided to the attendees regarding the real economic impact of the Economic Development Program on the US Virgin Islands.
FACT: Based on an independent impact analysis study conducted by the Council for Information and Planning Alternatives, Inc., EDC beneficiary companies made the following economic contributions to the Territory during the period of 1999-2007:
- $10.9 Billion in gross sales.
- $540 Million in local capital expenditure.
- $20 Million in charitable contributions to local charities.
- Created 8,300 jobs.
- Paid $730 Million in taxes.
- Generated over 12% of GTP.
- Generated 17% of tax revenues to USVI.
- Generated about $4 Million in local value for every $1 Million forgone in taxes (4:1).
This is incredible! Approximately 100 EDC companies in the USVI account for hundreds and hundreds of millions in local value to the Territory (Yes, do the math).
MYTH: Interestingly, we were told some individuals are opposed to the EDC Program because of the millions of dollars of "forgone taxes" the Territory does not receive because of the program. This is an absurd fallacy of reasoning that is based upon an incorrect premise. The millions of dollars of so-called forgone taxes are phantom tax dollars that would not exist without the EDC Program. Why? Because most, if not all, of the relatively few companies that are availing themselves of the EDC benefits would not domicile in the USVI without the tremendous EDC tax incentives. Additionally, any reduction in current tax incentives will only serve to drive existing and prospective EDC businesses away from the Territory.
While a few individuals may feel that the EDC Program "gives away" tax revenue to its beneficiary companies at a "cost" to the Territory, the facts reflect and confirm that the EDC Program attracting and retaining businesses with its current level of tax incentives is absolutely essential to the economic well-being of the Territory and is a cornerstone to the future success of the US Virgin Islands and its people. What other program exists that gets a 4:1 return on taxes which would never be realized in the first place without the program?!
