SOLOMONS STREAMLINE FOR FOREIGN INVESTMENT

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HONIARA, Solomon Islands (Solomon Star, June 27) - The Foreign Investment Act 2005 started operations yesterday, heralding a new era for Solomon Islands’ ability to attract foreign investment.

Solomon Islands had been missing out on its share of lucrative foreign investment because of lengthy delays in processing applications caused by an outdated Act.

"By encouraging more Foreign Investment the new legislation will create a large number of new jobs for Solomon Islanders. These jobs are desperately needed throughout Solomon Islands, especially in rural areas. The jobs will enable Solomon Islanders to learn new skills and how to use new technologies that will help them to be able to start their own business," Minister for Commerce, Industries and Employment, Francis Billy Hilly, said yesterday.

"Solomon Island owned businesses will also be big winners out of the new Foreign Investment Act. Every new business that opens in the Solomon Islands will need the products and services of local businesses. New buildings will need to be constructed, offices will need to be furnished and other business equipment provided. In short there will be a greater level of activity in the entire economy, meaning more business opportunities for domestic businesses. Contrary to some beliefs, extra foreign investment in Solomon Islands will not hurt local business, but instead greatly benefit it," Hilly said.

He added the Government will also collect extra tax revenue from foreign investors that it can use for rural development such as roads, schools and clinics. Overall the positive effect on economic growth from new investors will raise the standard of living of all Solomon Islanders and put the country firmly on the path to progress and development. In summary it will mean more ‘seleni’ (money) in everybody’s pockets," Hilly said.

The new Foreign Investment Act also establishes an Investment facilitation committee, which is a one-stop shop, to help both local and foreign owned businesses get established.

Fiji is an example of a neighboring country, which by encouraging foreign and domestic investment has created thousands of jobs and raised the standard of living of its people to several times that of Solomon Islands.

The new Foreign Investment Act will also help Solomon Islands share in the benefits that Fiji enjoys.

"The Foreign Investment Act is only one part of the economic reform agenda designed to improve the lives of ordinary Solomon Islanders.

"The Government is also working on an overhaul of the tax system designed to make it fairer and simpler; streamlining business regulations to make it easier to start and operate a business; improving the operations of State Owned Enterprises like SIEA, SIWA and Solomon Airlines, reforming shipping, assisting micro finance schemes and providing more assistance for local businesses," Hilly said.

Yesterday, too, the Income Tax (Amendment No. 2) Act 2005 also took effect.

It is a consequential amendment that is required by the Foreign Investment Act and gives the Commissioner of Inland Revenue the statutory authority to award income tax investment incentives.

The Commissioner will release Income Tax Exemption Guidelines to ensure that these incentives are awarded in a fair, simple and transparent manner.

These Guidelines will be based on the same principles as the Goods Tax and Import Duty Exemption Guidelines that the Acting Minister of Finance, Gordon Darcy Lilo, released recently.

June 28, 2006

Solomon Star: http://www.solomonstarnews.com/

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