A FORMER Government economist has blamed the system on the grant of exemption, providing an official document called Guide to Exemption Process as stipulated in the Customs and Excise (Amendment) (No.2) Act 2013.
Martin Housanau who was credited for a policy paper which resurrected the Commodities Export Marketing Authority (CEMA) was reacting to news report on the grant of exemptions this year.
According to the report, the government granted exemptions valued at $199 million this year. Critics said Chinese companies based in Honiara allegedly benefitted from some $29 million in the total exemptions granted this year.
“It is unfair and indeed wrong to point a finger at Chinese companies,” Mr Housanau said yesterday.
“But I am not surprised because If you are not familiar with the process, it is very easy to generalise as it is the case here, “Mr Housanau said.
“The Customs and Excise (Amendment) (No.2) Act 2013 contains the statutory requirements for the establishment of the Revenue and Customs Exemption Committee.
“The Committee will consider and make recommendations to the Minister of Finance on all applications for exemption from duties or taxes.
This means that from the 1st August 2013 a single committee, known as the Exemption Committee is established to consider both tax and customs duty exemptions, the Guide to Exemption Process document said.
All applications for exemption from export and import duties, goods tax, income tax, sales tax, and stamp duties will be considered by the exemption committee.
“The Secretary of the Exemption Committee will be responsible for receiving and responding to all exemption applications and will provide administrative support to the committee,” the document said.
Among other things, the two-page document explained how to submit my Exemption Application.
For example, the Exemption applications must be fully completed, using the “Non-Statutory Exemption Application form (the application form is available on our website or in IRD and Customs offices.”
“The Exemption application forms must be submitted to the Secretary of the committee at least two months prior to the activity for which an exemption is sought except applications under section 9 of the Income Tax Act, which must be lodged within 6 months of the commencement of business operation.”
“An exemption application will be assessed according to guidelines set (out) in regulations, you must read the Summary of process and requirements or the exemption guidelines to make sure you understand what is required of you.
“Your application will be pre-assessed by the Secretariat of the Exemption Committee to make sure sufficient information or particulars have been provided in support of the application.
“The Committee will inform applicants within five working days of receiving an application if further information is required,” the Guide to Exemption Process, said.
The document said the Revenue Exemption Committee will meet at least once a month to consider exemption applications.
“Applicants will be advised of the result of their application soon after the decision was made, within 10 working days of the decision,” adding the Minister’s decision on whether to grant or refuse an application is final.
“An applicant whose exemption application has been refused because of lack of information or particulars may make a new application only with new information that was not included in the original application,” it said.
An application must be submitted with a number of documents to support the application including, but not limited to:
- Your business plan, project plan, cost and benefit analysis, feasibility study, certificate of company/business registration, details of resources commitment, and an analysis of what benefit it is expected the government will receive. Please refer to the exemption guidelines for more information
- It is the duty of the applicant to make sure proper documentation to support your application is submitted
In considering your application, the committee will take into consideration the following:
- The requirements of the relevant law in Customs and Excise Act and the Tax Acts that were amended in 2012;
- Any guidelines prescribed in the regulations and the effect of the exemption on the national economy;
- Other necessary information required by the committee for the applicant to provide before making the recommendation report;
- Applicants may be required to make representation in support of their application.
Auditing of Exemption
From time to time, the committee will carry out inspections of the activities of any taxpayer for whom an exemption was granted; and
Publication in the Gazette
- All exemptions approved will be published by the Minister in the Gazette at the end of every 3 months period.
- An annual report of exemptions will also be submitted to Public Accounts
Committee.
Further information on the requirements can be obtained from the secretary of the Exemption Committee as well as visiting the IRD Visit our website: www.ird.gov.sb
Mr. Housanau said it is totally unfair to blame individual companies for assuming they were considered favourably on the grants of exemption. Exemptions are open to everyone
“It is the system that is at fault. And if we are to restore the integrity of the Committee, the system must be changed. Why? Because, blaming Chinese companies has serious connotations for the Solomon Islands-China diplomatic relations.
“Solomon Islands’ economic and infrastructure development is based on China’s people-to-people exchanges. And Solomon Islands has and will continue to benefit from those exchanges,” Mr Housanau, who now works as a private consultant, said.
- By Alfred Sasako
