Vanuatu Government says income tax would help pay for vital services

The Vanuatu Government says it’s considering introducing an income tax to broaden its revenue base to help pay for vital public services.

A government spokesperson John Sala says a government analysis has indicated a 17 percent income tax rate could apply to those earning more than 750 thousand vatu or six-thousand eight-hundred US dollars.

Just three percent of the population would be over the income threshold, leading the Opposition to question how a small number of people could pay for services for all.

But John Sala says the government needs to grow its revenue base.

“The government is underfunding vital social services such as education and health, and also its current external debts and there’s a lot of areas that need government financing so the government feels that it has to find other revenue streams.”

John Sala says the income tax proposal is open to public consultation as part of a wider review of the tax system.