Document Purpose

The purpose of this document is to provide feedback to the Revenue Review Committee on proposed Vanuatu Revenue and Administration Modernisation reforms by presenting key issues and arguments in a structured and fact‐based way.

It is important to acknowledge the need for modernisation of tax laws and administration in Vanuatu. Fine‐tuning of the tax system could help increase public revenues to support sustainable economic growth, particularly through infrastructure development and improved education and health, and achieve higher standards of living. At the same time, tax system adjustments should ensure overall efficiency and minimize market disruptions.

The consultation process should not be one‐sided. Instead, it should be an open discussion among all key stakeholder groups about the alternative means of reaching the goals and objectives set by the government. However, there are some critical issues with the current process which need to be highlighted:

• The Review Committee did not seek broad input during Review process. 
Information sessions were organized after Review Processes had ended. Consultations were presentation of the conclusions and of the decisions already taken by the Review Committee

• Lack of involvement of independent economists in the process. 
Introduction of corporate and income taxes is a decision that has many implications for the economy and requires a comprehensive expert evaluation. Impact study should be conducted and evaluated by at least three independent economists to ensure process transparency and well‐ informed decision making process

With this in mind, it is expected that the document will support and facilitate an open public discussion by illustrating major concerns of some key stakeholder groups which are currently not being fairly represented.

It also presents alternative ideas as suggestions for tax reform improvements aimed at achieving the common goal – helping Vanuatu progress toward success, modernity and life quality enhancement for all, by using innovative means.