Description/achievement of initiative
Since the arrival of the Regional Assistance Mission in Solomon Islands in 2003, core government functions have been restored and stabilised, institutions have been rebuilt and steady growth has occurred. While good progress has been made, there continues to be a need for ongoing support to develop core systems, processes and capability within the Solomon Islands Inland Revenue Department (SIIRD). Continuing this focus will enable SIIRD to deliver an effective and efficient tax administration system and respond to future tax policy reforms.
The arrangement has been a sustained, incremental programme, which has seen current New Zealand public servants seconded into the SIIRD, building institutional linkages that are mutually beneficial for the Inland Revenue departments in both countries. This has been supplemented by contracted specialists in key roles.
Arrangements for Capacity-Building and Technology Transfer
This partnership has significantly strengthened the core functions of the SIIRD (such as registration of taxpayers, collection of debt, auditing of taxpayers and leadership), increasing tax compliance, and expanding and protecting the nation’s revenue base. Tax revenue collected as a percentage of GDP have doubled (10.4% - 21.9%) providing vital funding to the Solomon Islands Government (SIG) as it has sought to restore fiscal and financial stability. Continued revenue growth has contributed to the expansion of government services. SIIRD is regarded as a high performing division, and the next five year phase will focus on maintaining the gains made and continuing to: o strengthen revenue operations and collection;o improve voluntary tax compliance and tax enforcement rates;o increase SI-IRD’s ability to input into and implement tax policy reform;o strengthen organisational capability and capacity; and,o improve the collection of organisational performance data. The enduring formal and informal relationships developed between NZIRD and SIIRD staff, led by a professional expatriate (Solomon Islands Tax Commissioner), have been critical to the success of the programme. NZIRD officials bring tax expertise and experience in successful public sector governance. In addition, there are tangible benefits to SIIRD from the provision of support from one entity, rather than through a team of private contractors (although they too have played a valuable role in providing specialist skills): NZIRD secondees have a similar work culture and can easily pool skills and resources to enable capacity and capability development of local staff. The opportunity for exchange has also contributed to strong informal linkages between NZIRD and SIIRD, which are likely to be enduring and contribute to longer-term sharing of information and best practices.The numbers of seconded staff will draw down over time, however the established institutional link will provide ongoing opportunities for exchanges and ongoing mentoring support.
Coordination mechanisms/governance structure
Since 2005, a long-term engagement at technical and executive levels has existed between the Solomon Islands Inland Revenue Department (SIIRD) and wider Ministry of Finance and Treasury (MoFT), and the New Zealand Ministry of Foreign Affairs and Trade (NZMFAT) and Inland Revenue (NZIRD). While the programme started out under the umbrella of the Regional Assistance Mission to the Solomon Islands (RAMSI) Financial and Economic Management Strengthening Programme (FEMSP), we are now entering into a new phase (2014-2018) of direct New Zealand bilateral management working in partnership with SIIRD. Australia continues to provide substantial support to MoFT and, along with New Zealand, is a participating member of the Solomon Islands Government/Donor Core Economic Working Group: which supports SIG's economic and fiscal reform agenda.
Solomon Islands Ministry of Finance and Treasury; New Zealand Ministry of Foreign Affairs, New Zealand Inland Revenue Department; Australia Department of Foreign Affairs and Trade