Who is Sleeping with the devil?

Tugeta Yumi Bildim Vanuatu

This is the revenue review web site sub-headline.

Can someone tell me who is you and who is me? Is Yu the Australian Governments Tax office and Me our very own Council Of Ministers?

Our PM in conjunction with his fellow Ministers seem to be determined to force through income, corporate and personal tax. No real consultation, just do it, they are really only giving us lip service.

Nothing more and nothing less. They need to listen to the people, talk with us and not at us.

Honesty is required here, Vanuatu is not currently capable of dealing with this new proposed tax initiative, and they barely can complete the simple tax collection we have currently. No one is able to tell us how much we don’t collect, how much is lost through poor enforcement of current procedures and lack of willingness to address the collection from certain sectors of the community.

Nor can they tell us how much they waste through the inefficiencies that are ingrained in the current system. Surely we should be addressing the here and now and not trying to over complicate our lives with a tax regime that is not Vanuatu at all.

Forget the fact for a minute that we don’t have a large enough tax base, We simply are not qualified to implement and follow through with enforcement of this new and levitarian tax intention of which the current government is promoting.

The realistic part of it is that Australia wants to close our tax haven status to prevent Australians investing their money in a tax-free Vanuatu. Certainly we will lose these investors when we impose the proposed new tax.

Why are we dropping business licence fees and VIPA? These are legitimate income streams we achieve already and they are not disputed and administration is easy. Why would we drop them? They also provide essential data to the government to allow detailed analysis of where the country is at as per the private sector.

The proposed new tax is unwieldy and cumbersome it lacks direction and purpose and ultimately will achieve nothing more than create inflation destroy what little job market we have and stifle development resulting in poor economic growth and a reversal in our economic status.

Why are we not leaning towards the nations who have a deeper understanding of Vanuatu culture and support us for us and not for their own personal gain? Their main focus is predominately to protect both human rights and women’s rights. The EU is a classic example of a group of countries that have supported us and will continue to do so without asking for anything in return. [approx 2.24 billion vatu as budget support.] We are an aid reliant economy. We have no manufacture, what we did have we lost. We have no real marketing to overseas even though it has been tried mostly unsuccessfully excepting a few which really don’t have the thru put to make any significant difference to our GDP. I am not anti-tax I am just anti this tax.

A simple solution is;

We Increase VAT to 13%.

On the same form as the VAT to make for easy collection we have a 1% turnover tax. This is solely for government revenue.

Again on the same form as the VAT we have a 1% tourism levy. This is solely for the promotion and development of tourism in Vanuatu. Not for government revenue.

2% tax paid by the employer on behalf of their employees as a form of payroll tax into VNPF for ease of collection.

2% tax paid by the Employee as a form of income tax into the VNPF for ease of collection.

A minimal international transfer tax for inbound and out bound foreign exchange in any currency ours included. This would be a percentage point and I have been assured that the current structure within the banking system would absorb this easily without any inconvenience except maybe the banks.

Negotiate for a twenty year extension, why because the country is not ready, the people are not ready. We have just come through cyclone Pam, then the runway debacle. The country simply can’t take any more.

Abolish PACER Plus—it has no real benefit to us as we are not an exporter we are only a importer. This is a cost burden that we simply can’t afford.

Remembering the income tax is just the start then we have hot on its heels corporate tax and personal tax which means everyone will have to be registered and pay tax. There is no difference in a corporate tax and a personal tax we will all be taxed and I don’t believe that Vanuatu is ready for that. The base rule for this is income less expenditure and tax is paid on the difference. How will we police, enforce and collect this proposed new tax when the alternate outlined in brief is so much simpler and is in line with what we currently do to collect our current raft of taxes. Sure we need to strengthen its implementation but it will leave us with a simple and workable administration. Vanuatu needs to grow in its own time and within our own social structures and cultural ways.

This tax as outlined above will generate more income for the country, is fairer and won’t stimulate inflation causing an increase in the cost of living, it will be absorbed as a matter of course and it is fair on everyone. If one man carries the branch it is heavy if 10 men carry the same branch it is just a branch.

The one fundamental flaw with the proposed new tax reforms is we will all be taxed either directly or indirectly with some being taxed both ways. Directly by personal and income tax as well as corporate tax. Indirectly by the cost of goods resulting in inflation that will affect more so the grass roots then it will the more financially secure groups.

Please note that the indirect tax does not go to the government coffers, it goes to the retailers and basic cost of living. In no way does it help the economy. No one will escape the increase in cost of living, no one more so then those on outer islands as all delivery services will just blow the inflation rate out of the water and make it nigh on impossible to afford goods and manufactured food stuffs.

The core of the society is the main contributor to the society. This is the key if this proposed new tax plan were to take effect it would strip the people of Vanuatu of their identity. This proposed plan will have only 10% of the population contributing to the identity of Vanuatu. This will be very divisive to the country as a whole.

In Bhutan they measure their country economy in happiness not GDP. They call it the National Happiness Index [NHI] perhaps we should adopt their philosophies it seems to be working for them. Please Ministers who wish to bestow upon us this Proposed new tax, open your minds and at least listen to what we have to say and make an informed decision based on what we want in Vanuatu. There is alternatives that won’t affect us and yet achieve a better result fiscally for the country.There is no need for anyone to be sleeping with the devil.

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