VANUATU’S SHEFA SEEKS RAFT OF PROPERTY TAXES

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VANUATU’S SHEFA SEEKS RAFT OF PROPERTY TAXES Few attend public hearing

By Marc Neil-Jones PORT VILA, Vanuatu (Vanuatu Daily Post, Oct. 8, 2009) – Only fifty people turned up to SHEFA to be briefed on the proposed new and controversial SHEFA Property Tax that has been passed by parliament and gazetted.

[PIR editor’s note: Shefa is a province of Vanuatu, including the islands of Epi and Efate and the Shepherd Islands. Marc Neil Jones is owner and publisher of the Vanuatu Daily Post.]

More would have turned up had they known the figures being looked at by SHEFA. These include taxing hotels Vt1.5 million [US$15,890] a year and anyone else involved in tourism activities would be charged from Vt200, 000 [US$2,119 ] per annum for a small scale business, Vt500, 000 [US$5,300 ] for a medium scale tourism business and Vt800, 000 [US$8,475 ] for a larger business, however no details were provided on what constituted a small, medium or large scale tourism business.

Likewise commercial activities would carry a tax of Vt30, 000 [US$318 ] per annum for a small Ni Vanuatu operated business or shop, then up to Vt200, 000 [US$2,119 ] for a medium scale commercial business up to Vt500,000 [US$5,300 ] for a large scale industrial business.

All residential cement houses would carry an annual tax of Vt15, 000 and Vt10, 000 for part concrete rising to Vt15, 000 for concrete commercial farming buildings.

Emile Mael, in charge of the new Property tax, made it clear to people at the meeting that all comments made would be considered and looked at before a final byelaw was drafted and implemented.

In the briefing paper SHEFA talks about needing the funds to run SHEFA properly despite already having implemented a departure tax out of Port Vila. Mael confirmed that there were only 30 staff working under SHEFA and funds were needed to improve roads and install lighting all over the province.

The funds raised through property tax would be spent 50% back to tax payers in the form of services, a fact questioned by many present as SHEFA is audited through the central government Department of Provincial Affairs and little information is ever released to the public.

The SHEFA services mentioned at the briefing session to be introduced include garbage collection which is currently handled effectively by Ni Vanuatu in some areas such as Mele, and would put Ni Vanuatu out of business who are currently involved in waste management and garbage collection.

Concerns were rife at the meeting. Many people voiced the same points, "why can’t the government give more money to SHEFA if it brings in most of the VAT collected outside of Port Vila? The fact that SHEFA gets the same budget as all the other provinces is ludicrous. The government are cutting their own throats in the name of politics because if more taxes are added for business in SHEFA, investment will simply dry up."

"Why can’t the government give back a small percentage of the VAT raised in the provinces back to the provinces? This would encourage the provinces to ensure that VAT was paid, as it would increase the amount they received in their budget. It would be the same for all provinces and would be acceptable to the government because it treated all provinces in the same way. The more they earn for the central government, the more they would receive back to help develop the province."

Small restaurants and businesses springing up outside of Port Vila will be hit particularly hard by the new proposed tax.

Other onlookers asked SHEFA if they had a proper business plan and would accounts be audited to show that 50% of the tax money collected went back into improving SHEFA.

Others asked why no tax was levied on people from outside of SHEFA in the form of a residential tax and were told that the council wanted this but other provinces complained it went against the Constitution of freedom of movement and was dropped.

It was unanimously agreed that the amounts of tax being looked at were far too high given the fact that all businesses already pay an annual business tax to SHEFA and VAT to government and get little or nothing in return by way of services.

Emile Mael advised that SHEFA would announce the final draft for the byelaw and advise people.

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