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

services that would require it to charge and collect sales tax and remit the proceeds itInland Revenue.Import duties are charged on a wide range of imports, but duty rates have been greatlyreduced over the last ten years as part of trade liberalisation policy. When a schedule oftechnical and scientific equipment and other specialised imports is available, an investorshould request exemption from import duty on the initial importation as a valuable formof assistance to undertake the investment. Such exemption is possible and seems likelyhere if the case is well put; note though that requests are as a matter of principle treatedsceptically because of a history of abuse of ministerial powers of duty remission.8.4 IncentivesThe government has recently moved to regularise the granting of incentives for new andadditional investment, by moving the function from the former Investment Board to theInland Revenue Division. There an Exemptions Committee considers requests and makesrecommendations to the Commissioner of Inland Revenue.Within the limits of the tax law, guidelines to the Commissioner are laid down by theMinister of Finance. These stress that government revenue should only be forgone by thegrant of tax exemptions if there are clear net economic and financial benefits expectedfrom the proposed investment. Pearl farming’s investment cost and benefit profile isunusual and will require careful explanation to the tax authorities, but it should bepossible to make a good case for tax incentive treatment that fits the likely profile.The government has indicated that it wants to reduce the importance of specificexemptions and concessions as incentives to investment by creating a ‘more level playingfield’ for all businesses. Personal tax rates and thresholds are generally regarded as out ofdate and uncompetitive, with change long overdue. It seems likely though that aninvestment incentive in the form of a multi-year business tax holiday would remain, toenable capital invested to be recouped faster than would otherwise be the case (see 8.3).The most likely and useful business tax incentive available to a pearl farm investmentappears to be a tax holiday (exemption from business profits tax) for a period of up to 10years, the actual period to be decided on basis of the projected performance of thebusiness. This would be assessed by the Exemptions Committee and put forward to theCommissioner. A well-argued case should be able to obtain the maximum exemption.9. Licence under the Fisheries Act, 1998A pearl oyster farm will require a licence as a ‘fish processing establishment’ under theFisheries Act. There should be no difficulty in obtaining this from the AquacultureDivision of the Ministry of Fisheries, once the proposal has been registered under theForeign Investment Act. Under the 2005 Regulations a fee of SBD10,000 is payable foreach species farmed. If both gold and black-lip shell are farmed it is likely that two feeswill be payable.18