Transcript
ABIGAIL CHANG: It is really about digitising the process of submissions of tax returns, of tax assessments, digitising the assessment, the response from IRD, the payment options and the payment channels, as well as the analysis. And this is for five tax groupings the goods tax, sales tax, pay as you earn and the PAYE reconciliation's, income tax and withholding tax. Generally it is also going to be able to facilitate self-management of tax obligations by tax payers because they can now do e-filing of tax returns in IRD web portals.
KOROI HAWKINS: So at the moment there is no online or electronic means at all. It is all paper and cash?
AC: Basically what they have is a significantly manual processes for all of the five tax groupings so at the present what would happen is that an individual or a company or a small business would approach IRD and manually lodge submissions. The IRD would manually do the assessments provide a response to the tax payer there would be manual queries done. And then if there is a payment to be made this would also be done at the cash counter of either the district office of the Solomon Islands government or at an IRD office or if there was a reimbursement that would also then be collectable from one of these offices as well. Any analysis of taxes or tax-payer for reference purposes are all also quite manual at this stage.
KH: That just makes it a lot harder doesn't it for people to go about, it is already difficult running your business or going about whatever your job is and then having to do that manual process I would assume that a lot of people just don't do their taxes or do them properly?
AC: So you would be quite correct there Koroi one of the driving factors for the Pacific Financial Inclusion Program in actually undertaking this activity is just being mindful that about 66.2 percent of the population rely quite exclusively on informal financial services and are generally financially excluded. So with this particular modernised tax revenue management system there is an opportunity for the 123,800 salary and wage earners who maybe eligible to receive a tax assessment to be able to interact with the formal financial service. So currently because as you mentioned and as I discussed is quite manual what then happens is that a lot of people are not actually putting in a submission they are not doing assessments. And they may not even know that they are eligible to receive a tax assessment.
KH: Or pay tax.
AC: Yes. The system provides also an opportunity for a taxpayer to be able to go online look at what your tax portfolio is have a look at what you might need to pay or what you could claim on. And then just generally do an informal sort of tax using the tax template. Do an assessment and so you should generally know whether or not you are required to make a payment or are eligible for a receipt.The opportunity that there then also exists is that they would then be able to generate a tax identification or a tax reference which they could then use to take to a bank or use a banking channel to make a tax payment on.
KH: And currently none of that exists. And what kind of timeline are we looking at? When will people be able to do these things or see these changes?
AC: So we are taking our first approach towards this and we are expecting by the end of 2018 that much of the system will actually be online. Quite a lot of the consumer awareness would have been conducted with taxpayers both out of the individual, small business as well as the large corporates having been conducted. One of the focusses for all of this activity is to focus on the customer and on the taxpayer and making sure that they are actually aware of the taxes that are there, the services that are already offered, as well as what they are eligible for.
KH: Now one aspect of this project is it is a pilot isn't it? there is a quite a similarity of Solomon Islands' situation across tax departments in the region. What does the future look like or are there already assessments ongoing in other countries?
AC: The Solomon Islands provides us quite a good opportunity to scale this up to other countries. So generally low digitisation of government to people payments and persons to government payments is a situation that is prevalent right across the Pacific. And at PFIP we believe that the successful demonstration through the digitising of for instance tax payments in the Solomon Islands, whilst modernising the tax revenue system will also have a really positive influence on not just other tax departments but other major players both in the Solomon Islands and the Pacific who would be able to move towards digitising government to person payments as well as person to government payments. I think at the end of the journey or at the end of a particular program for us at PFIP we are always wanting to go back and see what the impact has been on financial inclusion and in improving access to formal financial services and so we see this as a pilot opportunity not just within the Solomon Islands but also wider across the South Pacific.
