Kuma exempts Sino Capital from paying $1.9m to Gov’t
By CHARLES KADAMANA
IN a year the Government struggles to collect revenue, Finance minister Harry Kuma in June granted Malaysian logger Sino Capital tax relief amounting to $1.9 million, documents Island Sun cited show.
Mr Kuma’s decision followed a request Sino Capital, owned by Gary Cheah, submitted to the Ministry of Finance and Treasury in May.
In its tax relief submission, Sino Capital claimed the impacts of covid-19 has impacted negatively on its efforts to clear its tax liability to the Government.
The submission followed a more than $2.86 million tax bill the Inland Revenue Department imposed on Sino Capital.
Of this total tax bill, $1.38 is for Sino Capital’s core tax liability, while $1.5 million is for penalties due to the logging company non-compliance.
Sino Capital also claimed between 2014 and 2017, it has stopped exporting logs, while continuing to incur cost until its shares were sold/transferred.
However, records from Customs Island Sun cited showed Sino Capital continued to export logs in the years it claimed it had stopped its export operation.
In granting Sino Capital its request, Finance minister Kuma used his powers to cancel two thirds of the total tax bill Inland Revenue issued to the logging company.
This is equivalent to $1.9 million in lost revenue to the Government.
As a result, Sino Capital was only required to pay $953,751.31 of the total tax bill of $2.86 million it owed this nation.
At the same time, Kuma issued directives for two bank accounts Sino Capital held at Pan Oceanic Bank (POB) that the Inland Revenue Division frozen to be lifted.
Sino Capital, a foreign logging company, has been operating in the country for many years.
Since 2009, it has been operating in various concessions in northeast and east west Guadalcanal.
However, last Tuesday, Guadalcanal Province suspended the logging company’s operation after it discovered Sino Capital never conducted timber rights hearing before starting its logging operation.
At the same time, landowners and chiefs where Sino capital was operating, wrote to the police to investigate why the company continued to operate while it failed to meet one of the basic legal requirements of conducting timber rights hearing.
They also claimed Sino Capital operated without a Technology, Management and Marketing Agreement, as well as Development Consent.
These are basic legal requirements all logging companies must meet before they can operate.
An email sent to Sino Capital for verification was not responded.
Meanwhile, Guadalcanal lawyer and adviser to landowners and chiefs, Jefferson Leua, said while every business is affected by COVID and government revenue slowing down, it was just unimaginable the Finance minister could see it fit to grant this tax relief to a foreign logger.
“Not only that but this is a logging company that has been operating illegally on Guadalcanal from the start by failing to conduct timber rights hearings.
“Yet the finance minister sees it fit to grant them tax relief amounting to $1.9 million.
“Where is the justice here?” Leua asked.