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Modernised taxation system for the Solomon Islands

Published: Thu 10 Aug 2017 04:48 PM
Modernised taxation system to transform the tax and payment landscape in the Solomon Islands
11th August 2017
Honiara, Solomon Islands – The Solomon Islands Inland Revenue Division (IRD) announced plans to modernize the Government’s Revenue Management System, vastly transforming the tax and payment landscape in the Solomon Islands.
As a direct outcome of this modernization project, an estimated 123,800 wage and salary employees, 200 corporate taxpayers and 3,684 small businesses will be able to undertake tax-related transactions with the Solomon Islands Government in a timely and efficient manner.
The project, funded through the support of the Pacific Financial Inclusion Programme (PFIP), will result in end-to-end automation of the receipt, assessment, payment and reimbursement of all tax types involving both, corporate and individual clients of the IRD.
PFIP has provided a grant of USD $454,200 and will create the linkages to the client, which either do not exist, or do not exist in a structured manner. These key linkages are between the taxpayer and the IRD but also critically between the taxpayer and the formal financial system/ formal financial service providers.
In launching the project, Permanent Secretary of the Ministry of Finance and Treasury Harry Kuma said that the modernized system worked towards the Solomon Islands commitment under the Better Than Cash Alliance (BTCA) to use electronic payment channels.
“Given that 60% of Government’s revenue comes from the IRD, the modernized revenue management system will enable Government to drive greater efficiency, reach and provide quality services to the public. This project brings the Solomon Islands a step closer to achieving the National Financial Inclusion Strategic goal of transferring 80% of all government payments to digital channels by 2020.”
Speaking about the benefits of the project, IRD Commissioner Joseph Dokekana said the system would allow for self-management of tax obligations by taxpayers via e-filing of tax returns using an IRD web portal for registered online taxpayers and facilitating the generation of e-payments of taxes via commercial banks (internet banking, ATM, EFTPOS and over-the-counter).
“The project forms the critical component in the IRD’s tax revenue modernisation efforts and will comprise the development and implementation of the technological solution to the IRD’s Revenue Management System for five tax types, banking linkages, business processes, training of IRD staff together with support services from the technological service provider,” he said.
He added that the removal of the manual process of lodgment, receiving, analyzing and reporting would improve response times and accuracy of assessments of tax payments for clients of the IRD
PFIP Government-to-Persons (G2P) Payments Specialist Abigail Chang said that the project presented opportunities to expand financial inclusion in the Solomon Islands, with around two thirds of the adult population currently not accessing formal financial services.
“The modernisation of the tax system will bring into the formal financial sphere, taxpayers who do not presently interact with formal financial services and will build individual, small business and corporate customers familiarity and trust with financial service providers, the financial system and electronic transactions through successful interactions with payments and receipts relating to taxes,” she said.
She added that the system would also enable the development of business processes relating to the online lodgment of tax forms, assessment of the same, responses to clients, analysis and development of reports.
Tax departments in the Pacific are characterised by largely manual processes of receiving tax returns, assessing and responding to taxpayers, limited payment options for taxpayers wishing to pay taxes, significant cash handling in both the receipting and payment functions and risks of cash-reliant activities.
This project, will address those core challenges facing revenue departments in the Pacific and provides the opportunity to test and implement in the Solomon Islands, an electronic and online tax management system, which can be replicated across the Pacific.
IRD also announced that it would undertake training and upskilling its staff to utilise the new functionalities in the Revenue Management System and will conduct comprehensive user education and awareness on E-filing and E-payments of taxes, including appropriate financial literacy linked to the deployment.
About PFIP
PFIP is a Pacific-wide programme that has helped 1.5 million low-income Pacific islanders gain access to financial services and financial education. It achieves these results by funding innovation with financial services and delivery channels, supporting policy and regulatory initiatives, and empowering consumers.
PFIP operates from the UNDP Pacific Office in Suva, Fiji and has offices in Papua New Guinea, Samoa and Solomon Islands. It is jointly administered by the UN Capital Development Fund (UNCDF) and the United Nations Development Programme (UNDP) and receives funding from the Australian Government, the European Union and the New Zealand Government.

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