MINISTRY OF FINANCE AND TREASURY
MEDIA RELEASE 

Finance Minister Increases the Personal Income Tax Exemption

The Minister for Finance and Treasury, Hon Rick Hou, today announced that the Government will increase the personal income tax exemption from $7, 800 to $15, 080 as from 1 January 2012. In this respect, taxpayers earning $580 and below per fortnight will be exempt from paying Pay As You Earn (PAYE) tax. This change will positively affect all taxpayers. It will reduce the amount of tax all taxpayers are required to pay.

Minister Hou said that the personal income tax exemption (PITE) for Solomon Island has been low in comparison to other tax jurisdictions within the Pacific region. He stated that our minimum PITE has remained unchanged for more than a decade and the matter has become more pressing as the prices for goods and services rapidly increased.  Minister Hou said that the Government is committed to ensuring that low income earning individuals are able to support themselves and their families.  The PITE increase will make life easier for all income earners who pay personal income tax through the (PAYE) system as their disposable incomes will increase.

 Minister Hou stated that PAYE tax has been one of the many revenue sources for the Government over the recent past years. Revenue collected from PAYE contributes 24% of total collection by Inland Revenue Division (IRD) over the past 2 years.

The increase in the PITE, which will be tabled and approved by Parliament, is part of the Government’s 2012 Budget.

For more information on this Press Release contact Shadrach Fanega, Permanent Secretary, Ministry of Finance and Treasury on PH 21058.