Stimulating investment in pearl farming in ... - World Fish Center

Authorised exporters are allowed to retain funds offshore to pay for imports to minimiseinward and outward transaction costs.Capital movements require Central Bank approval, which is readily given on proof oflegal status and availability of funds, e.g. repatriation of declared dividends or of capitalon sale of an investment. Anti-money-laundering legislation requires banks to reportsuspicious transactions, and customers may be required to provide proof of their identityand nature of transactions.4.2 Taxation and incentives4.2.1 Tax structureThe profits of resident corporations are taxed at 30%, non-residents at 35%. Incalculating profit, deductions from income are allowed only for costs incurred inproducing that income and capital expenditure is not normally a deductible expense, butdepreciation is deductible at prescribed rates. 100% deduction of capital expenditure isallowed for certain agricultural, livestock and scientific purposes, and it should bepossible to make a good case for the same treatment to apply to development of pearlfarming. Tax losses can be carried forward for up to five years provided there is nochange of shareholder control.Employers are required to deduct personal income tax (PAYE) from their employees’wages and remit the proceeds to Inland Revenue. Individuals are taxed on an incrementalscale. (In this section $ means SBD) Above a personal allowance of $7800 per year,income is taxed at 11% for the next $1-$15,000, 23% for the next $15,001-$30,000, 35%for the next $30,001-$60,000, and income above this is taxed at 40%. An additionalrequired deduction is for the national superannuation fund to which employers contribute7.5% and employees 5%.Goods tax is charged though there are a number of categories of imported goods exemptfrom goods tax, including scientific and research equipment. Exemption from goods taxfor any such equipment and other specialised imports required for pearl oysterdevelopment may be possible.Import duties have been greatly reduced over the last ten years as part of tradeliberalisation policy. When a schedule of technical and scientific equipment and otherspecialised imports is available, an investor should request exemption from import dutyon the initial importation as a valuable form of assistance to undertake the investment.4.2.2 IncentivesAn Exemptions Committee of the Inland Revenue Division considers requests for taxbreaks and makes recommendations to the Commissioner of Inland Revenue. Pearlfarming’s investment cost and benefit profile is unusual and will require carefulexplanation to the tax authorities, but it should be possible to make a good case for tax19