BY LORETTA B MANELE
Gordon Darcy Lilo, Central Honiara Member of Parliament and Independent member has strongly suggested that government apply direct tax on capital gains.
Speaking on the floor of parliament on Monday, May 12 he said the country is missing taxation and stamp duty is not enough to get the real value of income that is moving around.
Lilo said there are only two forms of tax and they are direct tax and indirect tax.
While direct tax is paid directly by a person or organization, indirect tax is tax passed off by the government on goods and services.
He stressed that one form of direct tax is to tax capital gains; a tax on the profit when you sell something such as an asset that has increased in its value.
Lilo said this involves taxing the wealthier.
“There is huge money going around in the country right now. Assets have been transferred from one to the other.”
Lilo said as Solomon Islands is a small economy, we have to balance this now in the way we apply tax.
He reiterated that they must choose to apply direct tax or indirect tax, balance the two or not.
Lilo encouraged government that given the current situation, taxing capital gains is one avenue that should be taken.
“So, my submission is this. If you want to strengthen the fiscal situation more, you need to tax now.”
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