Section 16 of the Income Tax Act provides for Minister to exempt certain income and people from paying tax.  Similarly, section 37 of the Goods Tax Act provides for Minister to exempt certain persons and goods  from goods tax. These exemptions provide an opportunity for the government to give limited support by way of tax exemptions to qualifying businesses as one way of encouraging business investment and economic development in the Solomon Islands.

Exemptions, however, cost the government revenue and create distortions in the economy by discouraging businesses or sectors that do not receive exemptions.

To assist the Minister with his decision making guidelines have been established setting out the principles by which application will be considered and a committee set up to consider application and provide  advice and recommendations to the Minister. Taxpayers wishing to access the above exemptions need to apply to the exemption committee addressing to Commissioner of Inland Revenue. The Committee meets every two weeks to screen the applications.

There are statutory exemptions available to schools, charitable organizations, and health authorities and government departments. These exemptions can be found in the First Schedule of the Goods Tax Act. 

These exemptions are provided for to assist these institutions to better deliver social services to the people. Inland Revenue Division approves these exemptions based on the legitimacy of the application and endorsement from reputable personnel from the authorities.