ADB, Solomon Islands sign $15.5 Million Grant to boost Tax Reform
THE Asian Development Bank (ADB) and the Government of Solomon Islands today signed grant agreements amounting to $15.5 million to help improve the country’s tax system.
The agreements, part of the Domestic Resource Mobilization Project, were jointly signed by ADB Executive Director Tony McDonald, acting on behalf of the Government of Solomon Islands, and ADB Pacific Department Director General Leah Gutierrez.
The project is co-financed by ADB and the governments of New Zealand, Australia, and Solomon Islands.
It will fund the restructuring of the country’s Inland Revenue Division, install a new tax administration information system, provide training to staff, and deliver a national campaign to increase taxpayer understanding and compliance.
“Work conducted through this partnership comprised of the Government of Solomon Islands, Australia, New Zealand, and ADB will help revitalize Solomon Islands tax system through the various reforms which will lead to a more transparent and fairer tax framework,” said Ms. Gutierrez.
“A more efficient and effective tax system for Solomon Islands is an important goal of the Solomon Islands Government, and New Zealand is pleased to partner with Solomon Islands, the Government of Australia, and ADB on these reforms,” said New Zealand’s High Commissioner to Solomon Islands Georgina Roberts.
“Ultimately, these reforms will help ensure that all Solomon Islanders enjoy the benefits of development and prosperity.”
“Australia looks to the leadership and commitment of the Solomon Islands Government, and we are delighted to support efforts to increase the efficiency of a broad-based tax system that encourages productive investments—especially in the current COVID-impacted environment of slowed economic growth,” said Australia’s Chargé d’Affaires in Solomon Islands Sally-Anne Vincent.
The project will expand and secure the country’s revenue base by building on Solomon Islands’ ongoing tax reforms, including modernization of tax administration law, a review of income tax processes, and the introduction of a value-added tax.
Women taxpayers and entrepreneurs will receive dedicated support through the project to ensure they are fully informed of the tax changes and encouraged to participate in the formal economy, leading to a more inclusive tax system.
The Domestic Resource Mobilization Project is funded through grants of $5.5 million from ADB, $6.5 million from New Zealand, and $3.5 million from Australia. The Government of Solomon Islands is also contributing $4.6 million.
ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.
