PEC’s big fat lies to tax payers

A Solomon Islander who earns a salary of $2,944.38 a fortnight [$82,775/year], is taxed $622.87 [PAYE], NPF contribution of $147.24 and basic rate of $29.45. His net pay for the fortnight is $2,145.32.

Out of $2,145.32, he/she will have to meet bus fare for himself/herself, food, electricity, water bill, phone, school fee etc. and the list goes on.

Sometimes because it takes time before the cheques are cleared, he borrows to make ends meet, or he pays $100 fee to the bank to have the cheque cleared with speed.

Imagine the situation for those with lower pay than this

Many workers can hardly cope from pay week to pay week. Most struggle to make ends meet daily.

Of the deductions made to his/her pay the biggest is the government tax or PAYE.

People are willing to pay or make these sacrifices with the hope that the government will use the tax payers’ money to improve social services, schools, clinics, provide water supply and sanitation, enough medicine and medical supplies in the clinics as well as build economic infrastructures to bring about development in the country.

Furthermore, out of the money collected as tax, be it PAYE or otherwise, teachers, nurses etc are paid reasonable wages for the work they do educating our children and ensuring the human resources of this country are healthy and productive.

But we see this is not where the bulk of the tax payers money goes.

The truth of how people struggle to survive each day can be seen in women visiting offices, on roadsides etc with their markets early daily to supplement their partners salary to feed their families, pay school fees, uniforms and the list goes on.

At the National Referral Hospital, the patients’ carers are lying on the floor, or sleeping in the corridors of the country’s top hospital.

While poor citizens are struggling to put food on the table there are a special group of people that enjoy the biggest cut of this tax payers money without a single contribution to the fund that pays them their salaries, their special entitlements, their housing allowances and the list goes on.

These are the members of parliament who are enjoying lucrative tax-free salary, allowances and other entitlement.

Members’ of Parliament allowances have always been tax-free and when their salary is added to the tax-free award, all the entitlement of Members of Parliament is now totally tax-free.

It is these instances that moved the five citizens one of them a member of parliament represented by their pro bono lawyers to challenge the tax-free salaries of the politicians in 2015.

The case was heard by the Chief Justice Albert Palmer, who ruled the tax-free salary and other entitlements in Regulation 2015, awarded to MPs by the Members of Parliament Entitlement Commission (PEC) unconstitutional and null and void having taken a number of months examining the submissions put before him.

PEC as we know challenged the Chief Justice’s ruling in the Court of Appeal.

The Court of Appeal, the highest court of Solomon Islands ruled that MPs can benefit from tax-free salaries and whilst the policy may be unpopular with the public, it’s still legal.

Transparency Solomon Islands criticised the court’s decision, saying the ruling “has created an unstoppable monster”.

Furthermore, TSI maintains that just because it is legal it does not make it right.

The decision is not morally, ethically, responsibly correct or good for the well-being of our people and the development of our country, especially when it benefits a privilege few.

To date this unstoppable monster continues to eat away public funds with no tangible benefits.

Members’ of Parliament benefits continue to increase each year.

TSI is urging PEC should act on their powers to revoke the tax free despite the Court of Appeal decision has drop the tax-free salary.

The Court of Appeal overturned a High Court ruling that the committee’s decision was legal.

The decision was disappointing as it has created two groups of citizens in this country.

We now have two sets of law, one for those that are excused from paying tax by law (MPs) and one that will crucify people, companies etc for not paying tax.

The ruling of the Court of Appeal ignited long discussions in the social media, particularly the Forum Solomon Islands International, ordinary citizens, the Union, and academics who expressed their disappointment.

Such a decision from the Court of Appeal is a slap on the face of tax payers in the country.

The decision provoked a strong backlash in the media, and among non-governmental organisations and provincial MPs, and re-enforced the view held by many Solomon Islanders that politicians are self-serving and lack integrity.

They make laws to benefit or protect themselves.

To recap, the decision of the Court of Appeal decision resulted in protests from the public and private sectors lead by the Solomon Islands National Council of Trade Unions (SICTU) in 2016.

The public outcry and move by Unions who vowed to challenge the Court of Appeal ruling and take up the fight from where the five citizens reached to the next level, resulted in Parliamentary Entitlement Commission issuing a media statement on October 22, 2016 assuring the public that they will amend the tax-free provision and MPs salary will be taxed again.

Transparency Solomon Islands sighted the draft regulations sent by PEC that included this provision.

When it appeared before the PEC, TSI confirmed it was happy with the change – putting back of tax on MPs salary.

We further said, we do not have any issues with increasing the MPs salaries as long as we can afford it but these must be taxed.

We were keen to see this actioned and waited patiently for April 1, 2017 when change would be actioned.

Public outcry subsided after this media statement by PEC.

Silently April 1, 2017 arrived and lo and behold the salaries were increased by 3 percent and remain tax-free to date.

The Court of Appeal has ruled that PEC is a mini-parliament and enjoys same privilege and immunities that is accorded to the parliament in its decisions.

In the same token they can remove or revoke the tax-free salary.

April 1, 2018 has gone MPs are still entitled to tax free, in latest PER gazette effective on April 1, 2018.

None of the recommendations of the 2016 the Solomon Islands Parliamentary Constitution Review Committee have been actioned.

“More and more we are witnessing the effect of this Court of Appeal ruling. There are now two classes of people when it comes to public funds, those who rob it through pieces of self-serving legislations, excusing them from being investigated and a few that have been made to face the full brunt of the law we say.”

More and more millions of public money – tax-payers money are channeled through members of parliament and their cohorts without being accounted for.

This is not right and can only be changed when we stand up to be counted.

Is it fair on a sick child, a worker who pays tax, students who go without their allowances, clinics closing, lack of water supply and sanitation for the communities that the people we expect to look after us are syphoning off the funds with very little tangible benefit.

Is it fair that without contributing to these funds because they pay no tax that they should receive a 7.5 percent pay rise with 3.5 percent of this back dated to April 2016, get two thirds increase in their discretionary funds, which are often called slush funds, lucrative life pensions?

All of these when they do not contribute to the fund through taxing their salary like everybody else.

Whilst Transparency Solomon Islands acknowledges that the Parliamentary Entitlements Commission is a constitutionally established institution whose job is to review MPs salaries and entitlements on an annual basis, with its decisions coming into force automatically every year on April the first.

Does it have to amend the regulations each year and raise entitlements and salaries each year.

Transparency Solomon Islands views the tax free privileges of Members of Parliament as “absolutely outrageous”.

TSI urges PEC to honour its announcement to the press in 2016 and tax the members’ of parliament salaries.

It is time we revisit this issue. Tell us what you think and share with us your views on this issue. Contact us at Hyundai Mall Room 226, phone 20391, 28319.

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