As I wrote in a letter yesterday, the SI Government has approves new tax measures and the Minister of Finance and Treasury, Harry Kuma outlined the measures in his budget speech in Parliament on Tuesday this week.
Solomon Times Online today gave further details of the proposed taxes and I quote.
First on the list is an increase on Tobacco Excise starting on July 1 this year including introducing a system of taxing the popular home grown Tobacco commonly branded as Lekona. Government expects to earn SBD$24.9 million in additional revenues from this measure. This measure was approved following the completion of a review of the Tobacco Excise regime.
Second is the introduction of the Plastic Tax of SBD$0.50 cents environmental levy on plastics that are identified as major contributors to environment pollution. Single use and harmful plastics are going to attract this levy. The increase will generate minimal revenue of around SBD$1.1 million each year. This will discourage the importation of plastics and encourage using environmental friendly products other than plastics.
Third on the list of the new measures is the Raw Sugar Tax, which the Government will impose a levy at the rate of SBD$1.00 per Kg on raw sugar starting on 1 May 2021.
This particular measure is part of the Government’s national strategy in combating non-communicable diseases in the country. This Tax when fully implemented will generate additional revenue of SBD$7 million per year to the Government.
Fourth is a soft drinks tax, which is covered under the NCD policy strategy including soft drinks at the proposed Levy rate of SBD$1.00 per Kg. This tax when implemented will generate an additional revenue of SBD$6 million per year to the Government.
Meanwhile, Minister Kuma said that Non-Tax Revenue fees showed the potential to improve further despite the impacts of the COVID-19.
He said Ministries collecting non-tax revenue need to seriously look into ways to improve and seal off loopholes to collect this much-needed revenue to finance services and boost the fiscal spending to stimulate the domestic economy.
There are also inadequate levies that should be reviewed across ministries to factor in changes in the inflation rate per annum to reflect the cost of providing services while maintaining a level of cost affordability to all Solomon Islanders.
Mr. Kuma also said government’s focus now is shifted to use the $US currency, specifically for paying of fees and charges by foreign own companies, more specifically in the fishing industry.
This should help increase the level of foreign reserves to maintain stability in the domestic market, strengthen the value of the SBD currency, and promote foreign investors’ confidence.
The government also agreed to review the current tax regime on mineral exports in 2021 with the intention to impose export duty on the exports of mineral products.
End of quote.
Source: GCU Media Release and Solomon Times Online.
Comments
Raising taxes on tobacco, alcohol and sugary beverage products could help prevent premature deaths due to Non communicable diseases (NCDs), while yielding more in revenue.
The majority of deaths from NCDs, such as cardiovascular disease, cancer, respiratory disease and diabetes, occurring in the Solomon Islands where consumption of tobacco, alcohol and sugary beverage products is rising and putting a huge strain and financial burden on the MHMS, makes sense
Increasing taxes is the most effective policy intervention to reduce the use or consumption of “killer“products and to address the growing NCD epidemic
If we want to improve Solomon Islander’s health, we need to tax the things that are killing us - tobacco, alcohol and sugary beverages
No communicable diseases are the leading cause of death in the Solomon Islands
Deaths from NCDs, such as cardiovascular disease, cancer, respiratory disease and diabetes have risen out of all proportion over the years, as I have regularly written about.
The proposed taxes on tobacco and sugary beverages should be seen primarily as health taxes. to work towards a comprehensive NCD prevention programme.
Yours sincerely
Frank Short
