Income tax

The Salwai Government is likely to impose income tax after the Council of Ministers adopted a controversial report from its Revenue Review Committee.

World Bank economist Kim Edwards says it's hard to predict exactly what effect the Ambae Island crisis will have on Vanuatu's economy and the government's grand plans.

“It’s a bit difficult to tell at this stage. I know the government has its own people on the ground monitoring the effect of the evacuation and what responses might be needed,” Edwards told Pacific Beat.

The Vanuatu Daily Post reported the new tax plan, which would see the introduction of income tax and corporate tax, was submitted to the council of ministers on Friday last week.

It said despite widespread opposition to the reforms the plan was submitted virtually unchanged to the Finance Minister Gaetan Pikioune and if passed will come into force in July next year.

The general manager of the Vanuatu Chamber of Commerce Astrid Boulekone says it was disappointing that the government had not taken the views and alternatives proposed by the private sector into consideration.

The proposal, vehemently opposed by the private sector, was mostly unchanged from an earlier draft.

The government of prime minster Charlot Salwai pushed for income tax to increase government revenue and transparency.

But opponents in the business community said it would be detrimental to Vanuatu's fragile economy and cost a lot for little gain.

A draft proposal was released late last year before a series of consultations.

Speaking at a public forum at the Grand Hotel in Port Vila, Vanuatu, yesterday the visiting ILO Senior Wage Specialist, Daniel Kostzer said he noted that compliance had been an issue in the implementation process of VAT and pointed out that the income tax would just be more complex than managing the current Value Added Tax regime.

Kostzer said what we need is a household survey and a lot of analysis etc that would give us a clear number of our labour market covering household expenditures etc.

Ofis blong Prime Minista i askem ol media tu blong oli mekem ol investigation mo risej long ol tok tok we istap kamaut long ol press konfrens ia blong oli no joenem opposition blong mislidim ol pipol blong Vanuatu.

Ofis blong Prime Minista i mekem komen ia folem tok tok blong lida blong opposition long Daily Post news paper long las Saturday ova long ting ting blong gavman blong introdiusim income tax.

Branding the policy as “evil” Mr Kalsakau said Income Tax will only affect the low income earners like market vendors but not corporate businesses and high income earners because they can still survive while your most needed portion is taken away.

The Opposition leader made these remarks in a historical public press conference inside Port Vila’s main market house during the busiest lunch hour of the week on Friday. This opposition weekly press conference is normally held at the opposition conference room at parliament house every Friday morning.