St Helena : St Helena’s Draft Income Tax Bill Released
Submitted by Saint Helena Herald (Juanita Brock) 12.11.2008 (Article Archived on 26.11.2008)
The draft Income Tax Bill was released for public discussion on Monday 10th November 2008. The Bill draws on many of the comments made during public consultation carried out during July 2008 but focuses only on Income Tax.
St Helena’s Draft Income Tax Bill Released
The draft Income Tax Bill was released for public discussion on Monday 10th November 2008. The Bill draws on many of the comments made during public consultation carried out during July 2008 but focuses only on Income Tax. The Financial Secretary, Virginia Grace, said that income tax was only one part of the present review of the tax system and that the proposals relating to the broader reform of the tax system have yet to be fully considered by Government. Virginia went on to say that the overall purpose of tax reform was to broaden the tax base and share the burden more equitably amongst those who have the capacity to pay. Several of the income tax proposals discussed in July contributed to a broader income tax base and would have raised additional revenue to fund immediate tax relief but they have not been included in the draft Bill because of the concerns raised during consultation.
Government Tax Advisor, John Hayes said that the draft Bill generally does not impose any new income tax obligations. The primary aim of the draft Income Tax Bill is now to modernise the income tax law and change the way income tax is administered. He went on to say that the changes introduced in the Bill were based on international practices and most small nations with developing and transitional economies had reaped many benefits from adopting modern practices. However, the new Bill was only the first step towards implementing a better tax system and there were a number of challenges to be faced by the Income Tax Office. “The administrative changes will remove a number of the ineffective processes required under the existing Ordinance and enable the Income Tax Office to adopt modern techniques to ensure that people in St Helena pay their fair share of income tax.”
A major change in the Bill is the introduction of self assessment. John said that it that the Income Tax Office would focus on increasing its help and education activities to ensure that everyone had sufficient information to comply with their tax obligations. “Most countries now use self assessment and have found that the level of voluntary compliance increases when there are dedicated programmes to help people understand the law. I am confident that many of the problems that presently exist in St Helena will be overcome by a more visible Income Tax Office that works with the community to provide a broad range of services”. However, John noted that it was a fact of life that there will always be people who do not comply with their tax obligations. “When this happens, the Income Tax Office will identify these non compliers and ensure that they are held accountable. To achieve this, there will be a new investigation function focusing on registration, filing, payment and incorrect tax returns. The draft Bill introduces significant administrative penalties for people who fail to comply honestly and I would encourage everybody to seek professional assistance or contact the tax office if they are having any difficulties.”
Virginia said that consultation on the Bill has already commenced, as she was very keen to carry out public consultation in the two weeks leading up to John’s departure from the Island on 21st November. A series of questions and answers will then be released for general information but public comments will be accepted until 9th January 2009.
The main features of the Bill are summarised in a Fact Sheet released by the St Helena Government. However, as the tax laws are often complex and detailed, Virginia encourages everybody to seek further information from the Income Tax Office or participate in the public consultation.
Public Relations/Information Office
Office of the Chief Secretary
12 November 2008
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