Lilo Refutes Exemption Approvals

Minister for Finance and Treasury, Mr. Gordon Darcy Lilo. (Pic: Solomon Times Online)

By Andrew Fanasia Jr.

Minister for Finance and Treasury, Mr. Gordon Darcy Lilo refutes the information around the granting of discretionary exemptions previously published in one of the Solomon Star newspaper last week.

Mr. Lilo stated that in the month of September 2010 he has granted only 12 discretionary exemptions totaling a value of approximately $3 million.

“The statement which published in the local newspaper last week stated that the minister had issued exemption to a total of 162 exemption is totally incorrect,” Mr. Lilo said in a press conference yesterday.

The report in the media also stated that the figure (162) included statutory exemptions

Mr. Lilo however stressed that statutory exemptions that exist in the law and Minister has no discretion over these.

Mr. Lilo stressed that of this $3 million exemption, $2.6m was granted through customs duty and $0.4m was granted through Goods Tax while half of this exemptions approved were for churches, schools or rural community based initiatives.

“The total of 12 exemptions which was granted by the minister has been considered through exemption committee which was established under the amendment Customs and Excise Act 2002,” Mr. Lilo said.

Mr. Lilo question where did the media obtained the figure 162, but expressed concern of the level of reporting which may have tarnish the image of our government and mislead the public.

Meanwhile, Mr. Lilo stressed that while he does have discretionary power as the Minister of Finance and Treasury to exempt goods tax and import duty, he follows the strict administrative process that was established in 2006 to assist Ministers exercise this power in a fair and consistent manner.

Mr. Lilo further explained that the administrative process ensures that all applications for exemption are considered by Exemption Committees that sit within the Inland Revenue and Customs and Excise Divisions of the Ministry.

“Applications are considered against a set of criteria set out in Exemption Guidelines,” Mr. Lilo said.

He added that the criteria include the benefit to the Country-employment/infrastructure/rural development, applicants’ previous tax compliance, type and value of investment and any previous government assistance.

“The committee then forwards their recommendations to the Minister for approval,” Mr. Lilo further explained,

Mr. Lilo stressed that the process for granting exemption is not an exclusive responsibility of the Minister, “the exemption application process is vigorous and considerable effort is made by the committee to ensure that validity and genuineness of the applicants.”

“Where there is any suggestion that an applicant is misrepresenting the truth or using false names the application would be declined.”

Mr. Lilo said according to the legal advice from the Attorney General Chamber, it has been confirmed that under the Customs Act in view of the amendment that has been made to the Customs Act in 2002, “the Minister has no power to vary or even to receive appeal in the case of any recommendation or decisions that comes out from the exemption committee.”

“If the Exemption Committee reject or decline that particular application, that’s the end of the matter,” Mr. Lilo said.

“That is the new position of the law we have obtained from the AG’s Chamber.”

Mr. Lilo however stated that “the value and number of discretionary exemptions have reduced by 75% over the last 3 years.”

He said, this reduction is an encouraging measure of achievement on the part of the exemption application and screening process.