New Zealand's high commissioner to Vanuatu, Brian Smythe, has joined the local debate over taxes.
Mr Smythe says he went public after a newspaper editorial claimed the Value Added Tax or VAT had been unsuccessful, that there was a lot of avoidance and it had resulted in higher prices.
He says the latest assessment of the system by a New Zealand Government adviser helping to install VAT shows it had a similar level of compliance to other countries and that it hadn't impacted on prices.
"VAT has been introduced to replace the turnover taxes and the customs duties were lowered at the same time, so there was no great impact on price level contrary to what people have said but it does mean that a third of the taxes are coming from VAT. It's a more stable situation when you are not relying on just one instrument."
