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WELLINGTON, New Zealand (RNZI, Mar. 11) - Vanuatu’s Minister of Finance says the controversial debit tax is necessary to help cover a growing deficit.

Sela Molisa says the debit tax, which starts at a ten-cent levy on bank transactions of US$10 is expected to raise over US$ 60,000 in revenue.

Molisa says that the money is necessary to keep public services, especially on the outer islands, operating.

His comments come before a rally opposing the tax, organized by Chiefs and NGOs in Port Vila this week.

Critics say the debit tax will penalize low-income earners and destroy Vanuatu’s reputation as a tax haven.

Molisa says money is needed to boost public services, which have been unable to keep pace with the country’s fast-growing population.

"Vanuatu's population grows at 2.6 percent per annum and demand for government services is high," Molisa said. "In the economy last year there was a growth of 0.2 percent, so we have this big problem - the deficit in the budget. So we are faced with this situation. It’s very grave and we have to raise money to continue to provide services otherwise things will come to a standstill."

March 12, 2003

Radio New Zealand International: 

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