THE Minister of Finance and Treasury, Manasseh Sogavare, has approved a total of $15.2 million in exemptions for Xiao’s Henderson Hotel Ltd, a Chinese company.
The exemptions include:
- 100% Import Duty Exemption: Valued at $5,778,605.13.
- 100% Goods Tax Exemption: Totalling $9,487,014.66.
Both exemptions were granted on 31st July 2024 and will expire on 31st January 2025.
The issuing of exemptions to both local and foreign businesses has been a topic of heated debate, particularly in 2024.
Minister Sogavare addressed the issue in Parliament, disclosing that the Exemption Committee under the Ministry of Finance and Treasury granted exemptions totalling $394,450,637.31 in the previous year. These include:
- Non-Statutory Exemptions: $122,831,609.
- Statutory Exemptions: $271,619,028.
Non-Statutory Exemptions by Sector:
- Agriculture: $4,861,969
- Construction & Infrastructure: $32,197,913
- Manufacturing: $32,475,240
- Telecommunications: $4,385,798
- Tourism: $26,849,193
- Riot-related Exemptions: $15,659,859
- Others: $8,460,637
The Minister acknowledged the “alarming” figures, noting that many exemptions were not fully utilised within their granted periods.
Minister Sogavare revealed that of the 60 exemptions granted since January, only 11 were fully utilised, while 49 applicants sought extensions. For instance, a company recently involved in media controversy used less than $5 million of its allocated exemptions before their expiration in mid-November.
Cost of Unutilised Exemptions:
- Agriculture: $3,143,390.40
- Construction & Infrastructure: $31,438,410.83
- Manufacturing: $32,475,240.76
- Telecommunications: $4,385,797.94
- Tourism: $28,567,771.62
- Riot-related Exemptions: $1,188,688
- Others: $7,572,583
This amounts to $108,707,883.53 in unutilised non-statutory exemptions and $256,863,429.49 in unutilised statutory exemptions.
Fully Utilised Exemptions
Certain sectors fully utilised their exemptions:
- Agriculture: $1,718,570.60
- Construction & Infrastructure: $759,502.17
- Riot-related Exemptions: $12 million
- Others: $888,000
This totals to $14 million in non-statutory exemptions and to $54 million in statutory exemptions, leaving a remaining balance of $345,635,318.06.
Minister Sogavare emphasised that extensions undergo thorough assessment by the Exemption Committee to ensure appropriate use.
Additionally, exemptions linked to MOUs, mining agreements, donor-funded projects and government initiatives were carefully monitored.
By EDDIE OSIFELO
Solomon Star, Honiara
