TAX BILL TO PARL

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National Parliament of Solomon Islands
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New law aims to bring in fairness

By EDDIE OSIFELO

MINISTRY of Finance and Treasury has presented the Tax Administration Bill 2022 to the Bills and Legislative Committee in Parliament on Tuesday.

Permanent Secretary, Dentana Mckini said the Bill provides a predictable tax system that improves clarity and certainty for tax payers with the need to plan for future seeking to avoid unexpected outcome

He said it is easy to work with the aims to control compliance costs for taxpayers

Further to that, Mckini said the bill is fair and appropriate to the state of our economy and paves the way for further developments and growth and it takes into consideration international best practices and local context.

Furthermore, Mckini clarified that the Solomon Islands’ current Tax system is outdated and complex, and relies on a very narrow base of compliant taxpayers.

“There is no overarching tax administration legislation, and individual tax laws are subject to different processes, timeframes and penalties for taxpayers creating an unnecessary administrative burden for Inland Revenue Division and compliance problems for taxpayers.

“The low rates of compliance and widespread discretionary exemptions create an uneven playing field for business,” he said.

The second session of the virtual hearing which was supposed to go page by page on the 175 clauses did not eventuate because of the objection by the Leader of the Opposition Matthew Wale to adjourn the inquiry.

The object of the Tax Administration Bill 2022 is to provide for the administration of the tax laws of Solomon Islands, with the intention of providing a modern administrative basis for the tax system and ensuring that arrangements are consistent across the different taxes administered by the Commissioner.

The Bill includes amendments to the Goods Tax Act (Cap 122), the Income Tax Act (Cap 123), the Sales Tax Act (Cap 125), the Stamp Duties Act (Cap 126) and the Public Financial Management Act 2013 that enable the administration of those Acts to be carried out under the Bill.

The Bill deals with the Inland Revenue Division, the Commissioner of Inland Revenue and tax officers, and their powers, functions and duties, and outlines the general obligations of taxpayers, tax representatives and tax agents under tax laws.

It also enables the Commissioner to make public and private rulings about how a tax law applies generally or to individuals and individual arrangements.

The Bill provides a right to object to tax decisions and appeal to the High Court and Court of Appeal, the powers for recovering tax and prosecuting offences, and the types of penalties for non-compliance, including late payment interest.

The Bill also sets up an electronic tax system enabling filing of returns and issuing of assessments electronically.

The Bill is part of the tax reform process of the tax arrangements in Solomon Islands which began in 2007.


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