Minister for Finance and Treasury, Gordon Darcy Lilo
By Agnes Menanopo
The Ministry of Finance and Treasury, through its Inland Revenue Division, is holding a Tax Policy Work Programme Consultation this week at the Heritage Park Hotel.
The consultation provides the Government with an opportunity to outline its tax policy priorities and planned reforms, while giving stakeholders a clearer understanding of the process and direction of its tax policy work.
Speaking at the opening of the consultation today, Minister of Finance Gordon Darcy Lilo said the programme is aimed at providing greater transparency around the GREAT Government’s tax policy priorities and planned reforms.
He said the consultation would also allow stakeholders to better understand the Government’s tax policy direction and the work involved in implementing reforms.
“This is important because tax policy does not sit within one part of the Government.
“The policy work needs to consider both the revenue objectives of the Government and the wider economic environment. Inland Revenue also has an important role in ensuring that policies can be administered effectively and that taxpayers receive the information and support they need,” Lilo said.
Minister Lilo said one of the most significant reforms under the Government’s tax reform programme is the introduction of Value Added Tax, or VAT.
“The Government has made its policy decision on VAT. The fundamental design of the VAT regime has been settled.
“Today is therefore not about reopening that decision or asking stakeholders whether Solomon Islands should introduce VAT,” he said.
Lilo said businesses would need to prepare for VAT registration, invoicing, record keeping, and the charging and reporting of VAT, as well as claiming legitimate input tax credits.
He stressed that education and awareness would be critical to a successful transition to VAT.
“We do not want businesses to reach implementation day and discover that they do not understand their obligations.
“We want businesses to have time to prepare, time to make changes to their accounting and invoicing systems, time to train their staff, and time to ask questions,” he said.
The Minister said the Government is committed to starting the education and communication process early, with the current consultation forming part of that process.
He added that further information, guidance, workshops and stakeholder consultations would be provided as the Government moves towards VAT implementation.
Lilo encouraged businesses and other stakeholders to participate in the upcoming activities and begin preparing for the transition.
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