BY NED GAGAHE
Finance Minister Sogavare says exemptions will be, things of the past after 2026.
Speaking exclusively to Island Sun yesterday, the Minister for Finance and Treasury outlined the government’s ongoing efforts to reform the taxation system in the Solomon Islands.
Sogavare emphasized the importance of supporting strategic sectors such as tourism and the role tax exemptions play in facilitating investments in these sectors.
According to Sogavare, the country’s current tax system is severely lacking.
“Our tax system is grossly deficient and structurally the worst tax system in all countries worldwide. That’s why we are undertaking a serious and major reform of the government’s taxation system,” he said.
Sogavare also highlighted the government’s plan for comprehensive tax reform set to take place in 2026.
“After 2026, all of these outdated taxes will be eliminated. There will be no more goods tax, We will be introducing a value-added tax (VAT), and tax exemptions will be a thing of the past,” he revealed.
The finance minister stated that tax exemptions are currently an essential tool for making the tax system more equitable for investors.
“The only way to make the tax system fair for investors in this country is to grant tax exemptions. This is the basis on which these exemptions are granted,” he explained.
However, he acknowledged the need for reform to ensure long-term sustainability and fairness in the tax system.
Sogavare also addressed the concerns about accountability in the process, assuring that there is a robust monitoring mechanism in place to oversee the use of tax exemptions.
“There is a checking mechanism in place. It’s not all wrong. We have continuous monitoring to ensure that exemptions are being used correctly and benefit the country as a whole,” he said.
This interview comes amid growing criticisms regarding the government’s tax policies, particularly the recent granting of over $15.2 million in tax exemptions to Xiao’s Henderson Hotel Ltd, a Chinese hotel developer.
While the exemptions have sparked controversy, Minister Sogavare defended the policy as necessary to encourage investment in critical sectors, particularly tourism.
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