BY JOHN HOUANIHAU
The International Monetary Fund (IMF) said that further delays in the Value Added Tax Bill 2025 (VAT) bill should be avoided.
Mission Chief of Solomon Islands for (IMF), Masafumi Yabara raised this during a press conference with the media last week when his team presented a preliminary report on 2026 Article IV consultation following a wider consultation after a visit to the country from March 9-20.
“Given the current situation of heightened uncertainty and risks, regarding the fiscal policies we see that reducing fiscal deficits and rebuilding liquidity buffers, I mean the cash buffers at the government, remain critical. And on the revenue front, we believe that further delays in the VAT bill should be avoided. And we see the need for accelerating efforts to strengthen tax enforcement and rationalize exemptions,” Yabara said.
He added that he understands that there are some concerns of the public about the VAT.
“We also see the merits of introducing VAT by improving the efficiency and transparency of taxation to the private sector. Because now you have different tax rates for different items. That makes taxation really complicated. Not only for the revenue authorities, but also for the people doing business in the field,” he said.
He further said that he also understands the concern and IMF believes that it is important to elaborate preparation for the introduction.
“Before the actual introduction of the VAT would be very important. Including to raise awareness of people on the VAT. But we see the merits of introducing the VAT like in other countries,” he said.
The Bills and Legislation Committee (BLC) commenced its inquiry into the Value Added Tax Bill 2025 on March 11 this year.
The Value Added Tax Bill 2025 is a key piece of legislation that aims to reform and modernise the country’s tax system.
The objective of the Bill is to simplify and modernise the arrangements for the imposition and collection of tax on the consumption of goods and services in Solomon Islands.
The proposed legislation seeks to repeal the current tax framework and introduce a Value Added Tax (VAT) system that aligns with tax regimes used across the Pacific region and internationally.
If enacted, the Bill will repeal the Goods Tax Act (Cap.122), Sales Tax Act (Cap.125), and Stamp Duties Act (Cap.126), replacing them with the proposed VAT system.
Photo credit: Loretta B Manele
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