This is an official response to advertisements in the newspaper by Mr Ian G. Kerr.
Dear Mr Ian G. Kerr,
We wish to provide the following comments as feedback to the 5th public notice request which you published on the 11th of March 2017 in the Daily Post.
We regret the delay in responding, however we hope you will find the responses below enlightening and answer some of the queries you have raised.
First and foremost, the general public needs to fully understand that the current works by the Revenue Review Committee is a national Government initiative.
Rest assured the tax reforms are not an agenda driven by foreign governments or donors.
It is unfortunuate that a lot of people continue to mislead and spread this untruth — that somehow the reforms are being imposed onto Vanuatu from outside.
The people of Vanuatu need to understand that if the current undertakings were not supported by the Government of Vanuatu, we would not have come this far in terms of all the works done to date since 2016. While foreign donors are here to assist the government in its policy developments and achievements, they know their boundaries and therefore can’t dictate to the Vanuatu Government how Vanuatu should grow into the future.
That is the prerogative of the government, and it is well within its call to decide the destiny of this nation.
Having said that, there are a number of donors providing assistance to the Vanuatu Government.
They include, the International Monetary Fund, through the Pacific Financial Technical Assistance Center (PFTAC) and the Australian Government through its financial support, under its long standing Governance for Growth Program (GFG), which has funded technical assistance within the Ministry of Finance and Economic Management.
The GFG also works closely with PFTAC in coordinating the support provided to us and PFTAC is funded by a number of governments in the region. More details about PFTAC are contained in the following link http://www.imf.org/external/np/otm/2011/110111.pdf
The assistance provided includes:
1) Revenue Review – Policy and Tax Review
- Funding of 3 technical advisors working on major undertakings with the Department of Finance and Treasury and the Department of Customs and Inland Revenue.
- Funding of some short term consultancy to provide economic advice on revenue forecasting and impact of revenue reform (PFTAC);
- Funding of a short term consultant to assist draft tax and related laws (PFTAC)
2) Revenue Review – DCIR modernization
- Technical assistance to evaluate computer system upgrades (PFTAC)
- Funding for systems upgrades for DCIR (PFTAC/GFG)
- Technical assistance for DCIR to implement its overall modernization plan (PFTAC/GFG)
The funding received from GFG and PFTAC are subject to the normal governance and transparency requirements associated with the provision of these assistance. There are no conditions imposed that restrict the Vanuatu Government in making any policy decision it considers appropriate.
3) Law Drafting
The funding includes support for the drafting of legislation. PFTAC has funded the provision of a short consultancy to assist the drafting of laws that would be needed if the Government decides to introduce an income tax in a setting like Vanuatu and the works are currently done together with the State Law Office and the Vanuatu Law Commission office.
Such support from the donors are not just because of the works that the Revenue Review Committee is currently doing.
These assistances have been sought and sourced well before the establishment of the committee. That is what donor-funded programs and financing facilities are there for.
Finally, rest assured that nothing is being done in secret as some are trying to insinuate.
The Government through the Revenue Review Committee will continue to provide public awareness to all citizens so that the whole nation is well informed about what the government intends to do with its revenue reform initiative.
Mr. Tony Sewen