Overtaxed, Underprivileged

And Now The Poor Old Solomons Overtaxed, Underprivileged Yet They May Be Hit Again!

Although private enterprise in the British Solomon Islands Protectorate is already overtaxed and under-privileged, the indications are that it is due for another tax slug.

RESIDENTS were interested in the recent visit there of a Mr.

J. Gregory who has been en gaged on redrafting Customs legis lation and tariffs. They had nothing

personal against Mr. Gregory, but they were, of course, aware that any changes in taxes of any kind were scarcely likely to be for their benefit.

It is rumoured that one of the measures Mr. Gregory was organis ing is the introduction of the so called “Bermuda” system of import duty, which has operated in Fiji for a considerable time.

The Bermudan system gets its name from the fact that it was in Bermuda that some inspired tax gatherer had the happy notion of assessing import duty on the c.i.f. value of goods, and not the f.o.b. cost, as in most countries (such as Australia, New Guinea, etc.), The Fiji government has, for years, been collecting duty on the freight and other costs involved in getting goods to their destination.

If goods are sent in by parcels post, the value of the stamps is added to the value of the goods, and the duty is calculated on that. This has meant a great deal more in Gov ernment coffers; agitation to have basis of calculation revert to the (Over)

Mr. Gregory smiles as he leaves Honiara, on MV "Citos" for Sydney and the New Hebrides, in November. But residents of the Solomons do not know whether to smile yet or not.

old f.o.b. system has got nowhere, where.

Mr. Gregory left the Solomons in the Citos in November. He expected to go on to Vila, to do a job for the people of the New Hebrides, but became ill and returned to London.

The Solomons are already bur dened by income taxation, a higher general rate of import duty than Papua-New Guinea, and export duties on all commodities.

Income Tax for New Guinea Residents of Papua-New Guinea (which is the only major Pacific Island territory not already taxed on income) are steeling themselves for the introduction of direct taxa tion there —probably in 1959.

The Planters’ Association of New Guinea has concerned itself with the probability, and it believes that the rate will be something like 47in the £ for company taxation and half the Australian scale for per sonal exertion.

The Association, as a body, does not object to income taxation, be lieving that if imposed fairly it would be the most equitable way of raising revenue. It does believe, however, that if income tax is im posed, modification or removal of import and export duties should follow.

But it can get no reassurance on this point.

The planting community takes the view that it has been bearing the lion’s share of taxation in the Territory, mostly through copra ex port tax. There is now, too, an ex port duty on cocoa, which they feel is “an iniquitous tax on a young industry”.

There is an export duty on rub ber, also, although this has not contributed to revenue to anything like the same degree as copra.

Planters (and others) regard ex port taxes on primary products as sectional taxation —and in 1957 these duties contributed £568,950 to P-NG revenue.

Elsewhere it's Income Tax Plus In view of the hopes of P-NG residents, it is interesting to see how residents of other Territories have fared.

Before World War 11, few of the Pacific territories had income taxa tion After the war, with new de mands for new kinds of amenities and social services, and with a new conception of what should be done for native welfare, governments everywhere had to find new field! for raising revenue.

Most of them have turned to in come taxation—Papua-New Guinea ir ?S the notable exception; but that did not mean that they quit more traditional fields of revenue raising. uc fF^j. n r nin eS , between JF2.000.000 to £F2,500,000 from import duty ner yeai. (Papua-New Guinea raised

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£A1,868,014 from import duties in 1957 and £586,950 from export duty.) Fiji has no export duty. But it has, of course, income taxation of up to 6 3 in the £. Rates of import duty in Fiji are generally slightly higher in P-NG for British goods, and for foreign goods very much higher.

P-NG has a general import duty of 15 per cent, (with no preference

for British goods) with tariffs 25 per cent, and 33J per cent, “luxury” goods, no duty at all foods, and very low duties clothing, household goods etc.

Taxes in Samoa, Solomons

Western Samoa has income 1 ranging from 1/- to 8/- in the: import duties with a general r of 25 per cent, for British and per cent, for foreign goods; fo and clothing are dutiable.

There are export taxes on all * ports—lo per cent, on copra, 1/case on bananas, 10 per cent, cocoa increased by .01 per cent, every £1 per ton in excess of £:: per ton.

The Solomon Islands (even wit out the proposed new Bermu tax) has a considerably higher ii port duty than P-NG, particulas for non-British goods. Export dut cover all commodities includi copra, with a duty of 15 per ce Income tax begins at £2Ol i annum with a tax of 1/3 in the rising by 12 one-thousandths of for every £1 increase in taxable come. After an annual taxable come of £1,500, there is a surtax} from 1/3 to 10/- in the £.

There are numerous deductionr a statuary one of £2OO, others wife, children, education, supers' nuation payments etc. A single me on £1,050 per annum pays £89.5 c income tax. A married man £1,170 per year, £64/6/4; a mam man with a wife and two childn on £1,536 per year pays £lO2/0 All these are facts P-NG resides should bear in mind before assuo ing that the introduction of a m tax will necessarily mean t abandoning of another.