VANUATU EXPORTERS TO PAY TAX TO PROVINCES

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Two percent tax to feed local government coffers

By Len Garae PORT VILA, Vanuatu (Vanuatu Daily Post, June 24, 2010) - All exporters of coconut or copra, coffee, potato, beef, kava, sandalwood, sea products, coconut crab, poultry or poultry products, pork or pork products and logs, timber or any other forest produce are required by law to start paying a 2 percent tax on the market value to the "Local Government Region" where the product originates.

The Local Produce measure was gazetted on June 15.

The Director of Provincial Affairs Cherol Ala wrote to all six Provinces to confirm the long awaited breakthrough this week on June 21.

"This has been an outstanding issue for a number of years and we are delighted that further to resolution after resolution of SGs and Presidential Forums this is now an Order and is to be enforced," she said.

"This is another revenue stream of Provincial Government Councils and we trust you will notify your enforcement officers of this piece of legislation. Please note that a 2 percent levy is imposed on all products listed in the Schedule of Local Produce Cess Act (CAP. 207)."

Secretary General of Shefa Province Michel Kalworai has welcomed the historic Order as a "dream come true" and congratulated Cherol Ala for her commitment towards the calls made by the SG and Presidential Forums for the Central Government to allow the Provincial Councils to create their own avenues for revenue collection.

So far the Central Government makes an annual grant of VUV30 million [US$291,000] to each Province and this is not enough.

Kalworai said the Amendment to the Local Produce Order No.11 of 1992 is the result of a unanimous call by all the Provinces to the Central Government for a better market share of Central Government revenues.

The call for the legal provision was made louder by the former SG of Malampa Province, Lambert Maltok in the SG and Presidential Forum in Motalava Island in Torba Province in recent times.

In that particular Forum, the SGs and Presidents heard from Maltok how well they did collecting revenue from their copra and cocoa in Malampa Province.

During that meeting, the number of items on the list was increased and the list went on to be legalised by the Order.

Kalworai also thanked the Minister of Internal Affairs Moana Carcasses for recognizing the importance of the call and "moving with precision" to support it.

"The implementation of this Order now means that we can work closely with the Departments of Forestry, Land, Fisheries, livestock, Agriculture and others to give back to the Provinces through our REDI Programs, what which have been either lacking locally or they have been overexploited in the past," the Shefa SG said.

Asked if Shefa has been paid any revenue from any such exports, Kalworai said they received approximately 1 million vatu from copra producers from Epi last year.

All exporters who export any one of the items on the list will be advised by the Provincial Councils of the new Order shortly. They will be given direction as to how to pay the eligible Province the 2 percent tax of market value of any produce or product being exported.

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