The final report on the case for revenue reform and modernization has been completed.
The official handing over of the Report to the Minister of Finance, Gaetan Pikioune, by the Revenue Review Committee Chairman, Tony Sewen, took place yesterday.
Sewen, on behalf of the Committee, said the comprehensive reform of Vanuatu’s revenue system has been a long, continuous and evolving process.
“These reform efforts incorporated review of current indirect taxes such as value added tax (VAT), excise duty and import duties, modernization of revenue administration and non-tax revenues.
“Subsequently a Revenue Task Force was established in 2013 to deal with outstanding revenue debts and administration of non-tax revenues. However, progress has been slow due to the various issues affecting the country,” the RRC highlighted.
He said the Council of Ministers decision in 2015 led to re-establishment of Tax Policy Unit (TPU) in the Ministry of Finance and Economic Management (MFEM) to provide effective management and leadership on revenue policy and law issues. The Revenue Committee (RRC) was established under the leadership of TPU to undertake the review of revenue reforms.
“The process of revenue reforms started out with the analysis of current revenue system in Vanuatu and identifying its shortcomings.
“In 2016, the Council of Ministers approved in principle the proposed corporate and personal income tax model and requested the Revenue Review Committee to undertake public and nationwide consultations of the recommended reform and subsequently provide a Report to the Council of Ministers detailing the findings.
“The various options and their impacts were discussed in all the consultations to arrive at the final recommendations.
“The Review has examined the potential impact of the proposed income tax and evaluated its impact with the guiding principles for a good tax system that was set out in Consultation Paper No. 1- The Case for Revenue Reform Modernization.
“Alternative revenue options, including those proposed during the nationwide consultations have also been evaluated with the guiding principles.
“The analysis on revenue forecasting is part of the model of the economy, based on the national framework for revenue forecasting and is part of the Model of the Vanuatu Economy (MOVE) that the Reserve Bank of Vanuatu is developing in association with the Department of Finance and Treasury (DOFT) and the Vanuatu National Statistics Office (VNSO).”
“I am happy to inform that the process of nationwide consultations and awareness sessions on proposed reform has been concluded, exhaustively covering all provinces of the country.
“This Report not only lists the findings and feedback obtained from the consultations but also aims to provide satisfactory answers to doubts and queries raised in the consultations and submissions.
“I want to express my gratitude and appreciation to the entire team working on the Revenue Review Reforms and also thank the Governance Committee members for their support and guidance in the preparation of this Report,” Tony Sewen, Chairman of the RRC concluded in his remarks and handed a copy of the Report to the Minister of Finance, Gaeton Pikioune.
The Report, according to the Finance Minister, will go before the Council of Ministers then to Parliament for debate before determination on its implementation, once passed by Parliament.