Any person or company seeking to invest in Solomon Islands can make an application for a tax exemption but no investor has an automatic right to an exemption, according to the Inland Revenue Division of the Ministry of Finance.
Applications are assessed by an Exemption Committee, using strict guidelines which have been approved by Government.This process was clarified by the Acting Commissioner of Inland Revenue, Andrew Minto, in a statement issued by the Inland Revenue Division (IRD) of Ministry of Finance today.
"The guidelines require the committee to look at the impact of the proposed investment on the country as a whole and not just the benefits to the investor and small select groups' investors are working with," Mr Minto said.
"The committee then makes a recommendation to the Minister of Finance and Treasury or the Commissioner of Inland Revenue depending on the type of exemption and legislative basis," he explained.
"Foreign investors are treated the same way as any other taxpayers unless the Minister makes the decision that is in the interests of the country to allow an exemption," he added.
Tax exemptions for foreign investors are a discretionary provision approved by the Minister only after carefully scrutiny and analysis of the applicant, revenue costs and broader benefits and implications for the county.
Mr Minto said that there is always a need to reach a balance between collecting taxes and offering incentives to local business and potential investors.
"But this does not mean that the IRD does not act impartially and fairly in its consideration of exemptions and in accordance with Solomon Island law and policies."
Mr Minto said the Division was acutely aware of how important foreign investment is to the Solomon Islands as it will assist in building a strong revenue base so the Solomon Islands can grow and prosper.
But it is also the right of all Solomon Islanders to expect all individuals or companies that make money in this country to pay their fair share of tax.
"This is the only way that all Solomon Islanders will benefit from the wealth that is derived from the investment," he said.
IRD role is to collect revenue to fund the government's budget and development plans and apply the law fairly and impartially."
"If an individual or company is willing to do the right thing and pay the tax the country is entitled to - no more and no less - then IRD will make it as easy as possible for them to do so. If, however, they have decided not to comply, then we owe it to every person who does pay their tax to apply the full force of the law to ensure they do comply."
IRD is also building strong links with the community, he said.
"This year the division has implemented a number of initiatives to assist businesses understand their tax obligations and are continuing to improve systems and processes to make it easy for people to comply," he said.
Mr Minto said it was important to note that advisers working in Inland Revenue must operate within the policy guidelines set down by Government as well as within the laws and regulations of the country.
"In the case of RAMSI advisers, we are also required to work within the recently finalized Solomon Islands Government and RAMSI Partnership Framework," he said.
"Advisers in IRD have excellent working relationships with management and staff alike," Mr Minto said.
"We operate in partnership with Solomon Islands staff in relationships which are built on mutual respect and trust."
RAMSI's assistance to IRD is funded by the New Zealand Government and has just been extended for a further five years.
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