By Loretta B Manele

The government is undertaking a comprehensive reform of our tax system and so the situation will certainly be different when the reforms come on stream.

Manasseh Sogavare, Minister for Finance and Treasury stated this when delivering his statement on “Administration of Tax and Duty Exemptions” in parliament on Monday this week.

He said the aim of this reform is to achieve the five attributes of the ideal tax system which are fairness, adequacy, simplicity, transparency and administrative ease.

“So that the very structure of the system itself and how it is administered gives no reason for tax payers to request intervention of tax authority to make the system fair”

Sogavare stressed that the country’s tax failed miserably on all these five attributes of a good tax system.

“The government does not shy away from admitting that our tax system falls drastically short of the required standard of an ideal system”

Sogavare added that the only way to increase revenue is to squeeze every cent out of the existing tax payers.

He said in this regard, tax and duty exemption is the only way under a very constricting tax system like ours of breathing life into the already suffocating tax payers of this country in the formal sector who pay 99 percent of the tax that funds services enjoyed 100 percent by ordinary Solomon Islanders.

“We are looking forward to the implementation of the reform system but in the meantime with all of that, the issue is not granting of tax exemptions per say and I fully appreciate that but the proper administration of the regime

The guidelines provided in the Revenue and Customs Exemptions Committee on Non-Statutory Exemptions Regulation 2013 has that concern as the policy reason for the establishment of the exemption committee”

Sogavare said the exemption committee is entrusted with a very important responsibility to ensure that the revenue requirement of the government does not kill the goose that lays the golden eggs and drivers of sustainable development in the setting of a tax system that is structurally deficient.