By Loretta B Manele

Manasseh Sogavare, the finance minister stated that he will require a quarterly report on exemptions and this report will serve several purposes.

He spoke about this in parliament during the first day of the Sine Die Motion which was this Wednesday 18 of December.

Sogavare said the first purpose of the report is to ensure that exemptions are properly utilized for the purpose for which it was granted and any misuse should result in its immediate cancellation.

He also stated that this is subject to legal advice including the recovery of the exemptions wrongly utilized.

In this case, Sogavare said the applicant will go down as a bad taxpayer and any future request of exemptions will not be entertained.

“The behaviour can also be an important trigger to commence full-scale tax investigation on the taxpayer”

Also requested is a final exemption utilization report.

Sogavare said in this report, the recipient applying for the exemptions is to effectively tell the government that the company wants to partner with the government in achieving its macroeconomic goals.

“For example, creating new jobs, contributing to the expansion of the sector in which the applicants invest in or constructions of important community infrastructures, servicing training program or countering the effect of climate change and many more”

Sogavare stressed that this information is very important for the government especially when the government is involved as an indirect partner.

He pointed out that it will be totally irresponsible of the government to allow taxpayers to do whatever they like with the exemptions granted.

The finance minister stated that any misuse of exemptions will be dealt with sternly and followed with full-scale tax investigation.

“The reasoning being, if the taxpayer is not honest about the request for assistance, he can be dishonest about his tax affairs”

In relation., Sogavare said he also directs an improvement in the capacity of the Tax Exemption Committee Secretary.

He expressed that the regulations are designed in a way that the minister rely on the advice of the committee to make decisions.

“The quality of the minister’s decision will depend very much on the quality of and accuracy of the advice he will seek from the Tax Exemption Committee”

Sogavare said while he appreciates that work of the committee, he believes there is a need to improve the quality of the committee’s findings which must include a professional analysis of the relevant financial statements that applicants are required to provide.

As stated, this analysis is important to decide on the quantity of the tax exemptions that the government can and could grant.