MARSHALLS FINANCE MINISTER DEFERS TAX MEASURE

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Ading wants more time to review

By Giff Johnson MAJURO, Marshall Islands (Marianas Variety, Aug. 31. 2011) - A new tax regime that includes the introduction of a Value Added Tax for the Marshall Islands has been drafted, but will not be introduced during the current and final parliament session of 2011.

Finance Minister Jack Ading said Friday that the legislation was ready, but that he wanted more time to review it. He indicated that it could be introduced in the January session of the parliament.

"I need more time to study the proposed system to be able to thoroughly explain it to the members of the Nitijela (parliament) as well as to the public during the public hearings and I am not ready to do it (study the new system) at this time with the budget and other work that requires my immediate attention," Ading said.

On November 21, Marshall Islands voters go to the polls to elected parliament and local government representatives.

Depending on the outcome of the national election, the tax plan could be introduced in January.

If the current government returns to office, "I plan to introduce the legislation in the January session to effectuate the new system," Ading said.

A tax committee comprised of government and business representatives proposed major changes to the country’s tax system for both business and income taxes. These proposals were used as the basis for drafting legislation.

But private sector officials involved in the tax discussions disputed some of the proposed tax rates recommended by government representatives.

"The main argument is with rates," said former tax commission representative Ben Chutaro. A key point of emphasis from the private sector was for the changes to be "revenue neutral," meaning that business and individuals would not see major increases in their tax rates.

Chutaro said it was encouraging that the legislation will not go into this session as this leaves more time for private sector input on the draft legislation.

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