President Surangel Whipps Jr. said more legislation is needed to grow the economy and reduce the tax burden on small businesses.
In his State of the Republic Address (SORA) last week, Whipps said his government is working with the Tax Office to identify common-sense amendments to improve the tax system. One such amendment would eliminate a few categories of importation tax, including household goods brought to Palau for those moving here and equipment brought to Palau for scientific research and educational purposes.
He said the government also wants to reduce taxes on small businesses by prorating annual business licenses.
“As with any major reform, PGST has come with growing pains. It is up to us to evaluate our experience, identify areas of improvement, and constantly work to improve the system for everyone. We will be introducing a bill shortly to address these concerns, and I ask for the OEK’s support. “
Whipps said he also supports the modernization of the country’s domestic corporate registry by introducing a new Exempt Corporations Act and an Electronic Transactions Act.
He also noted that Palau needs a bill to create an insurance commission to protect Palauans by regulating the industry.
He stressed that the insurance commission will also serve as a revenue-generating endeavor by creating a captive insurance industry.
Whipps said he would also work with OEK to create a Bankruptcy Code.
“Bankruptcy is an important tool that will allow honest people to get a fresh start and to make sure creditors are treated fairly. This will help encourage lending and economic activity,” Whipps said.
Palau, he noted, currently ranks very low in terms of “ease of doing business,’ in international surveys.
Solving this problem won’t be easy overnight, but it will require hard work and a series of projects. All of these initiatives require close collaboration between the executive and legislative branches. I look forward to collaborating with the OEK to enact these laws and modernize our economy to better compete in today’s ever-changing world.”