The Solomon Islands Chamber of Commerce and Industry (SICCI) in partnership with the Inland Revenue Division (IRD) on Wednesday 1 February 2023 hosted an Information Session for businesses focusing on the Tax Administration Act.

The Tax Administration Act was passed by Parliament on 9 August 2022 and is effective as of 1 January 2023 with the purpose to simplify and harmonise the rules for tax administration; and to reduce costs for Government and businesses.

SICCI, as the peak body representing private sector, welcomes this Act seeing it as a timely initiative by Government.

“The important thing is that there is dialogue between Government and the taxpayers and in the case of SICCI, our member companies,” SICCI Chief Executive Officer (CEO), Ms Natalina Hong, said.
SICCI understands that the creation of the new Tax Administration Bill is a component of Stage 1 of the Tax Reform Agenda initiated by MoFT, launched in 2017.

“We need a tax system that is comprehensive and holistic from the starting, and one that will examine problems within the system and seek solutions to deliver a tax system that will promote economic growth and one that is fair, simple and broad-based, which ensures everyone who is liable to pay tax, pays the correct amount,” the SICCI CEO said.

Delivering the main presentation during the Information was IRD’s Legal Officer, Mr Hitchen Dauara who first provided an update on tax reform in the Solomon Islands.

“The expected outcomes are to upskill the IRD staff across all taxes with service focus, clear, harmonised procedures documented, easier, cheaper for taxpayers to comply, improved compliance and more revenue for Government,” Mr Dauara.

Mr Dauara highlighted that the new Act brings the administrative rules from various tax acts together in one place and makes those rules the same such as for audit powers, debt collection, objections and penalties.

“The Act also provides legal backing for many administrative practices such as issue of TINs, registration of tax agents and issue of tax rulings.

“The purpose is to simplify and harmonise the rules for tax administration; and to reduce costs for Government and businesses,” he said.

Mr Dauara also outlined and provided explanation on other aspects including obligation of taxpayers, tax identification numbers, tax agent registration, filing of returns, tax decisions, tax audit, administration penalties imposed by IRD and tax rulings.

He said apart from the administrative rules, other taxing acts continue to operate as normal such as the income tax calculations, stamp duty rates, goods tax and sales tax.
Meanwhile SICCI reiterated its position for Government to continue reform taxation, as the act now paved the way for improvement, that will benefit many in the community.

Many members identified income tax rates as a particular concern, noting that low Pay As You Earn (PAYE) tax thresholds were administratively burdensome for business to implement and penalises low-income earners, but by reducing disposable incomes of workers that could support consumption.

“Noting the changes to increase in PAYE threshold in 2019, with all changes post pandemic recovery and the obligations we now have in modern society such as transport, rent, school fees and the high cost of living, Government needs to recognise this not just through the Basic Minimum Wage but by increasing the Tax threshold for PAYE - we need bold, decisive action from our Government that will benefit the majority of our workers,” the CEO added.

SICCI has consistently highlighted the tax issue with the Government through available platforms including the SIG-Private Sector Advisory Group meetings established by the Memorandum of Understanding (MoU) signed in 2017, and resigned in 2020. SICCI is also aware that the development of Value Added Tax (VAT) bill under the Ministry of Finance and Treasury is currently underway and looks forward to the consultation for SICCI members who are key employers in the private sector in Solomon Islands.

“SICCI has the goal that through our contributions, and that of other stakeholders, our tax system will be fair, modern, and simple enough to follow which enhancesemail:
taxpayer compliance in the country. We encourage the Government to take a broader view of taxation. One that sees the importance of course in raising much-needed revenue, but one that does not stifle businesses and growth in the country,’ SICCI said.
SICCI acknowledges Mr. Hitchen Dauara- Senior Legal Officer, Mr George Tapo- Deputy Commissioner , Mr Casper Sonia- Assistant Deputy Commissioner and Mr Michael O’Shannassy- Lead Legal Advisor and the rest of the IRD team for their in depth presentation and discussion.

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