Finance Minister Rejects Claims of Exemptions Saying Information Provided by Opposition Is Misleading
Minister of Finance, Manasseh Sogavare, has strongly defended the government’s decision to grant tax exemptions to a company involved in major infrastructure projects, addressing what he described as “misunderstanding and misinformation” circulating in the media.
At a press conference over the weekend, Sogavare sought to clarify the details of a tax exemption granted to a company engaged in a $94 million investment in a wharf and warehouse upgrade, as well as a tourist resort project.
Exemption Granted Based on Economic Potential
Sogavare explained that the exemption was granted based on recommendations from the Exemption Committee, which reviewed the project’s potential to contribute to the country’s economic development, especially in the tourism sector. He clarified that the exemption, initially issued in February 2024 under the previous government, was renewed after his appointment as Minister of Finance and is scheduled for another evaluation in mid-November.
He criticized the Leader of the Opposition and some media outlets for spreading what he called “misleading” information, particularly reports that exaggerated the scale of the exemption. According to these reports, the government allegedly granted nearly $30 million in tax exemptions for building materials. Sogavare rejected these claims, calling them “politically motivated” and “misleading.”
Exemption Minimal in Terms of Government Revenue Impact
Sogavare emphasized that the exemption had a minimal impact on government revenue, as the company had not yet utilized it to a significant extent. The company had only completed preliminary work on the proposed resort project, with no significant materials imported yet.
He reiterated the government’s commitment to transparency and accountability, revealing that the government had begun reviewing all major tax exemptions. Companies will be required to provide detailed reports to justify any extensions.
“We need investors to grow this country,” Sogavare stated. “This government is working hard to ensure the tax system is fair, and we are committed to protecting the interests of our people. But we must also create an environment that encourages investment.”
Sogavare Responds to Opposition Leader’s Criticism
Opposition Leader Matthew Wale criticized Sogavare’s press conference as “extremely disappointing but not surprising.” He accused Sogavare of failing to apologize for his actions and continuing to justify the tax exemption policy, which Wale described as a “bad decision.”
“The fact remains, Sogavare stood on the floor of Parliament in June 2024 and loudly announced that he was cancelling exemptions and not issuing new ones,” Wale said. “He misled Parliament and the people of Solomon Islands. That’s a fact.”
Wale also accused the Finance Minister of hypocrisy, claiming that Sogavare continued granting exemptions after his public announcement in Parliament. He suggested that the press conference was an attempt to cover up the issue now that the exemptions had been exposed.
Opposition Leader Criticizes Broader Economic Challenges
The Opposition Leader also raised concerns about the Solomon Islands’ broader economic challenges, particularly the government’s financial difficulties. “There are no medicines in clinics and hospitals, and people are dying as a direct result,” Wale said. “The government is unable to afford basic essential services. That is the real tragedy, and it’s clear Sogavare doesn’t understand that.”
Wale pointed out what he saw as an imbalance in the government’s economic policies, alleging that foreign businesses were receiving significant support while local businesses continued to struggle. “Indigenous Solomon Islands businesses need government support, yet foreign companies have the easiest access to exemptions,” he remarked.
Wale Questions Prime Minister Manele’s Leadership
The Opposition Leader further questioned Prime Minister Manele’s silence on the issue, calling on him to act decisively. “Why is Prime Minister Manele silent?” Wale asked. “Each day that slips by confirms the people’s perception that the Prime Minister is weak.”
Wale concluded his statement by criticizing the government’s promises of transformation, calling them “empty rhetoric” and suggesting they did not reflect the reality of life for most Solomon Islanders.
Government Stands Firm on Tax Exemption Policy
During his press conference, Sogavare defended the exemptions as part of the government’s long-term economic strategy to attract foreign investment in tourism and infrastructure. He rejected accusations of hypocrisy, stating that the exemptions aligned with the government’s economic priorities.
The Finance Minister also emphasized that the government would continue to review and monitor such policies to ensure they served the country’s best interests.
Ongoing Tensions Between Government and Opposition Expected
The ongoing tensions between the Finance Minister and the Opposition are expected to persist as both sides continue to debate the implications of the tax exemptions and the government’s broader economic strategy.
