Solomon Islands court halts MPs' tax-free salaries

A view of the Solomon Islands parliament Image copyright AusAID
Image caption Members of parliament will have to pay tax on their incomes after all

Campaigners in the Solomon Islands are celebrating a High Court decision to reverse a controversial tax exemption for MPs' salaries.

Chief Justice Sir Albert Palmer said several benefits brought in for MPs were unconstitutional and so should be "struck out", The Solomon Star newspaper reports. The country's Parliamentary Entitlements Commission approved a number of benefits, including tax-free salaries and an improved pension plan, in April 2015. The non-profit Transparency Solomon Islands group, various public figures and some opposition MPs brought the court case after a public outcry against the move.

The court ruled that, although the Commission had the right in principle to exempt parliamentary salaries from tax, it had acted unconstitutionally in not consulting the tax authorities first. Transparency Solomon Islands head Ruth Liloqula hailed the ruling as a "victory for taxpayers". She said Commission members had failed to take into account the overall state of the economy, pay rates and prices before recommending such generous benefits for MPs.

The tax exemption caused an immediate backlash at the time, with critics saying the money could be better spent on the crumbling infrastructure in one of the Pacific's poorest countries. Angry islanders donned red shirts in protest, although Prime Minister Manasseh Sogavare accused opponents of living in "an imaginary world".

The ruling isn't all bad news for MPs, though, as the court has allowed them to keep an extension to their meal and subsistence allowances to cover weekends.

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