TAX reforms are being rolled out in Vanuatu as the government introduces a new digital system designed to modernize the nation’s tax administration and bring greater transparency. The Vanuatu Sales Monitoring System (VSMS) was launched by the Department of Customs and Inland Revenue in a move that will streamline how the government can track and manage revenue.
Deputy Prime Minister and Minister for Finance, Johnny Koanapo, presided over the launch,
“Businesses are the backbone of our economy. Their contribution to public revenue is vital, and the introduction of VSMS ensures that this contribution is recognized in a transparent, fair, and efficient manner,” Koanapo said.
It is seen as a major step forward in the digitization of Vanuatu’s tax processes. According to officials, the VSMS will provide several key improvements: it will enhance transparency for businesses, bring down tax evasion, and reduce the size of the informal economy.
Koanapo stressed that the changes were a legal obligation under Vanuatu law.
“Large and very large businesses must comply by July 1, ensuring their systems are accredited and actively issuing invoices through the VSMS platform,” he said.
The new system will require a significant amount of time and resources from the private sector, and the government stands ready to assist in whatever ways are needed. SHEFA province has already started an awareness campaign on the new system.
This campaign is being rolled out in phases, starting with large taxpayers before progressively extending to medium, small, and micro businesses. The government stated that these sessions are designed to ensure all businesses clearly understand their new obligations and the mandatory deadlines for enrolment and compliance.
As a country with one of the most attractive low-tax jurisdictions in the world, Vanuatu relies heavily on value-added tax for revenue.
“The success of this reform depends on partnership. Government and business must work together to build a stronger, more transparent, and more efficient tax environment for Vanuatu,” Koanapo said.