Customised mystery

Solomon Islands Ports Authority
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Government ‘owed millions’ in uncollected non-resident withholding tax

By Alfred Sasako

WHILE the Government is trying to make ends meet, it is being revealed that it is ‘owed millions’ in uncollected non-resident withholding tax, sources familiar with the matter told Island Sun last night.

The sources said the failure to realise this is on the part of the staff of the Customs and Excise Division of the Ministry of Finance and Treasury. It is not clear why Customs staff appear to have ignored the non-resident withholding tax in terms of collection.

Non-resident withholding tax is a charge on in-bound and out-bound consignments levied against foreign vessels engaged in trading activities with Solomon Islands.

“They’ve just got to pay it. Why Customs is not collecting it is a mystery,” one source told Island Sun on the weekend.

The sources said the non-collection of this huge revenue windfall for the government has gone back five years from last year, during which period the amount outstanding is now estimated at about $260 million.

This figure represents 10 per cent of export receipts for two million cubic metres exported last year. The value of last year’s log export was USD80 million (SBD520 million), which attracts the non-resident withholding tax.

“This amount is just for the logging industry. It does not cover in-bound and out-bound cargo from the private wharf at Ranadi. If you include non-resident withholding tax from those using the Ranadi wharf, the government is owed potentially $300 million in non-resident withholding tax for the last five years,” the sources said.

“Customs have a lot of explaining to do on this matter,” they said.

No comments could be obtained from Customs last night.