Vanuatu Eyes Personal Income Tax

August 26, 2016 Taxation in Vanuatu

PORT VILA – Vanuatu may finally implement an income tax on workers, in an effort to raise funds to pay for free education for children.

The Prime Minister of Vanuatu Charlot Salwai has indicated that in the near future the country will start levying an income tax on personal income for local taxpayers, a tax which had not previously been applied in the country.

While speaking at the diamond jubilee of the Lycee de Luganville school the Prime Minister stated that the government needs to implement the tax in order for the country to take greater control of its own funding and to lessen its own reliance on development funding in the form of donations from other countries.

Significant portions of the taxes to be collected will be used to pay for free education of students up to year 10 of schooling, as currently education in Vanuatu is free only up to year 6.

The Prime Minister added that providing free education to year 10 will allow Vanuatu to fulfil its obligations under the United Nations Convention on the Rights of Children.

If enacted, the new income tax will be levied on the incomes of individuals earning in excess of VUV 500 000 per year (approx. USD 4 560).

Photo By: Luftphilia