Solomon Star

HONIARA, Solomon Islands (June 30) – The Government is now getting tougher on how tax and import duty exemptions are to be granted.

New exemption guidelines published yesterday require that applications for exemptions be made through established committees before they reach the Minister of Finance.

This new strict and rigorous process is aimed at protecting Government revenue from disappearing through unwarranted exemptions.

It was also aimed at ensuring there is transparency and accountability in the exemptions process.

This new measure is a far cry to previous practices where millions of dollars in exemptions were granted at the stroke of a minister's pen.

The Sogavare Government must be commended for these initiatives.

For far too long, leaders of this country have given away millions of dollars of government revenue in the form of exemptions to their cronies.

It was also encouraging to note that exemptions would no longer be given left, right or centre.

Instead, from now on, exemptions can only be granted to:

In addition, investments must satisfy a 'national interest test' that requires that the benefits of the investment must outweigh the revenue and economic costs of the exemption.

Under the exemption guidelines, these benefits include increased employment opportunities for Solomon Islanders, increased exports, improved public infrastructure and increased taxation payments.

These are well-intentioned initiatives, which when applied, would greatly improve the government's exemption process.

But it also needs to be highlighted that unless government officers administering the process do their job properly and stick to the guidelines, this new initiative would be as good as they are on paper.

It is no secret that the Public Service has a bad track record of sticking to the written rules.

The Audit and finance Act, for instance, is a piece of legislation that has been undermined so many times by public officers.

The challenge for the government is to ensure public officers implement the new exemption guidelines and stick to what it says.

Otherwise, we will just be talking about a mere piece of paper.

July 3, 2006

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