MAJURO, Marshall Islands — The first Business Forum supported by President Hilda C. Heine’s nearly one-year-old administration is scheduled to happen in Majuro in early November.
The two half-day sessions are aimed at bringing together businesses with government leaders and officials from ministries and agencies that relate to the private sector to give the business sector an opportunity to provide input and advice to the national government, according to Finance Minister David Paul, who has promoted the forum since earlier this year.
Finance Minister David Paul was sworn into office in January 2024. Photo by Giff Johnson
“We want to talk about how we can improve the business economy in this market,” Paul said in the lead up to the two-day program that will be held Nov. 5 and Nov. 6 at the Marshall Islands Resort. High on Paul’s agenda is tackling challenges facing local businesses trying to expand and improve their operations — chief of which is access to loan funding.
Among key items on the agenda will be:
A government effort to establish a “credit guarantee facility” with local banks that could allow businesses the opportunity of better access to capital for expansion. The finance minister said the government is in discussions with local banks about government backing loan programs for businesses to enable them to expand their investments in the economy.
A discussion about challenges of out-migration for business and possible ways to respond to the exodus, which has seen the Marshall Islands population decline by more than 20% since 2011.
The government’s tax reform plan, which includes a phase two to be introduced next year. The parliament adopted the first phase of tax and minimum wage reform during the September session of parliament. Government has increased an income tax exemption from the previous amount of $1,560 to $8,230 annually. This was linked to raising the minimum wage, effective Oct. 1, from $3 to $4 per hour. The new tax structure for income tax provides for zero income tax on $4 an hour wage earners.
Paul is keen to discuss and get feedback from businesspeople on the phase two tax modernization plan, which includes eliminating a U.S. Trust Territory-era gross revenue tax of 3% and replacing it with a net profit tax.
Similarly, phase two aims to eliminate current import and other taxes, replacing them with a “consumption” tax of 10%. The proposed consumption tax is a value-added tax. Paul points to Palau, which implemented a similar tax restructuring two years ago.
“We’re hoping for a large turnout of businesspeople for the forum,” the finance minister said.
The Business Forum will be held from 1.30 p.m. to 5 p.m. on both Nov. 5 and Nov. 6. mbj
