BY BARNABAS MANEBONA
IN a new twist to the ongoing public transport saga, the Inland Revenue Division (IRD) has revealed that bus owners have ‘not been taxed for so long, while other industries, sectors and employees have been taxed of their income’.
Commissioner of IRD, Mr Joseph Dokekana, in a media statement on Wednesday this week, explained IRD’s stand on the current public transport issue, justifying the business income tax as ‘very fair and marginal’ and ‘reflects the true position’.
Buses are taxed $10,000 per year and taxis $7,000 per year. Island Sun understands that this rate was established in 2013 under a project to tax bus and taxi businesses; it has not been enforced since then – until this year.
While defending the tax rate, Dokekana also issued a stern warning that IRD is ‘also ready and able to deal with those who knowingly step outside the tax system and hold them to account’.
“Bus and taxi owners are liable to pay income tax just like all other businesses in Solomon Islands. This is not a new tax,” the IRD statement said.
Dokekana adds, “The law is clear if you earn income and make a profit you need to pay income tax, just like those persons who are employed or run a business.
“The tax imposed has gone through due process through interviews and actual records inspected and it is very fair and marginal.
“We [have] also taken into account the impact it will have on the owners as they have not been taxed for so long while other industries, sectors and employees have been taxed on their income.”
Since last week, public transport owners have been rallying behind their interim associations (public bus and taxi associations) demanding that the IRD explains the huge tax returns, which they claim is unreasonably exorbitant.
After two meetings, bus and taxi operators decided on a sit-in protest yesterday in which no bus or taxi operated. This had a drastic effect on Honiara commuters from all walks of life, who had to make their journey on foot, or hitch a ride with some Good Samaritan.
Speaking to Island Sun yesterday, chairman of the interim public transport association, Mr Henry Wale nodded that they have not been paying taxes all along as stated by the IRD Commissioner.
He however asserts that IRD’s tax enforcement this year was sudden and had shaken public transport operators, hence their reaction in seeking an explanation from IRD and demanding that the tax be slashed.
Wale explains that the tax rate imposed by IRD is too high, and would result in their businesses making very minimal profit – ‘or none at all’.
Meanwhile, Commissioner Dokekana clarifies IRD’s attempts to gauge public transport owners’ stance on the tax rate, saying, “IRD have been attempting to talk to the Public Transport Association for the past [three] years but meetings arranged were never attended as they have no active association.”
He reiterates, “IRD promised to work with the members of the private sector who are willing to comply with the Solomon Islands laws and to make it easier for them to meet their tax obligations.
“IRD will work with individual owners to help them pay the tax payable by instalments over a period of time.”
It is understood that over 300 bus and taxi owners have registered with IRD and received default assessments and a guide.