Government plans nationwide consultation on taxation and revenuePosted: September 13, 2016
There will be a nationwide consultation on tax reform this month. Government has admitted that it is true that there are some good revenue initiatives in place such as VAT, business licence fees and import duties, but the core issue is even with existing revenue sources, Government is still unable to meet the demand for services by the people of Vanuatu.
Government says the implementation of an income tax will greatly reduce other taxes such as rent tax, business licences and turnover tax. It says this will balance the tax burden while also attracting investors. All this was advised in response to the Opposition Bloc’s weekend call for Government to consider other revenue measures, not just income tax and corporate tax. The Government further confirmed that it will embark on a nationwide consultation on personal income and corporate tax before the end of September.
The Revenue Review Committee (RRC) is now finalizing a consultation paper which will guide the reform, and the consultation will be based on the research and findings of the RRC conducted over the past months in preparation for the upcoming reform. Dialogue with several donor partners to assist with the reform has already garnered some positive responses.
Income Tax Services Impact. Government says the revenue raised from this reform will target free education and health services. Infrastructure, productive sector and security will be considered if there are adequate resources. The structure of the Department of Customs and Inland Revenue has set aside funding for staff to undertake income and corporate taxation work. Modernisation of the Department is proceeding, and cost cutting measures are in place.