Income Tax Gathers Steam

21 October 2016; Source: Vanuatu Daily Post
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In a clear indication that the revenue review team is learning from experience, the second public income tax consultation was much better attended than the first.

Yesterday’s gathering at the National Convention Centre saw more than 300 people gather to share their views on taxation and revenue matters.

The government presentation was much shortened, thanks to feedback from earlier debates, and a great deal more time was given to gathering public input. Views on the tax plan ranged from strongly supportive to strongly opposed. Some comments featured detailed proposals for improved efficiency in government services, consumer protection and financial protection.

The debate was perhaps the most spirited to date, with several commenters garnering scattered applause for particular points.

Some of the opposing arguments were well known. They included the burden placed on small businesses, the difficulty of collecting taxes in the islands, the complexity and cost of calculating earnings, profits and losses, as well as questions about what tax payers would get in return, given the paucity of government services generally.

The consultation featured moments of fiery oratory. Perhaps the highlight of the event was a peroration by Jean Paul Virelala, who unabashedly announced his support of the proposed taxes. He dismissed questions about the details of the plan and expressed his trust in the government to arrive at a threshold that would be fair to the people of Vanuatu.

“Enough with the ‘no, no, no’ that we’re hearing everywhere,” Mr Virelala added, “It’s all just negative bull.
“If you don’t want to pay tax you can leave,” he concluded, to laughter and applause both from presenters on the stage as well as the audience.

Others were more measured in their support. One supporter asked about the definition of ‘income’, in effect asking how taxable earnings would be calculated. The panellists, who included government Financial Analyst Rex Semeno and the Acting Director General of Finance, Mr Tony Sewen, agreed that a detailed definition would be necessary, but declined to go beyond bare generalities in their response.

Lawyer Garry Blake suggested that Vanuatu’s higher wage earners were in effect providing the welfare services that were provided by government in so many other countries. Citing school fees, emergency medical transport and treatment and support for the unemployed as common examples, Mr Blake said the revenue review team needed to understand the costs associated with the proposed new taxes.

The revenue review team hinted yesterday that the proposed timeline for the imposition of tax might not be written in stone. Responding to a question from the audience, Mr Semeno indicated that the question of the tax had been raised by Vanuatu’s commercial banks, and that their recommendation to slow the process down would be passed on to the Council of Ministers.