Financial Secretary Office News

Financial Secretary Office News

$19.4M Recovered From Tax Amnesty

In December 2016, the Prime Minister, Hon. Henry Puna, announced a tax relief package to the community in the form of a Tax Amnesty. In response to this announcement a press conference was held in January 2017, where the Minister of Finance, Hon. Mark Brown provided the details of the Tax Amnesty. 

The policy reasons for the Tax Amnesty stemmed from the identification of the overall tax debt owed to Government at the time being close to $36 million, of which, it was believed that approximately $25 million was collectible and the balance of $11 million was classified as being irrecoverable.

The main purpose of the Tax Amnesty was to put a large number of taxpayers in an improved financial position, through the remission of additional taxes (and other taxes where appropriate), so these taxpayers could better contribute to the future economic growth of the Cook Islands. The Financial Secretary, Mr Garth Henderson was pleased that the Tax Amnesty allowed taxpayers who had unpaid tax and outstanding tax returns to come forward, and be compliant with their tax obligations into the future.

The Income Tax Amendment Act 2017 gave legal effect to the Tax Amnesty in June 2017. The Tax Amnesty came into effect on 1 August 2017 and allowed taxpayers to make applications for relief up until 31 March 2018. The Tax Amnesty initially provided taxpayers relief from paying additional taxes if the outstanding core tax was paid or placed under payment arrangement.

In January 2018, the Tax Amnesty was extended with the passing of the Income Tax.

Amendment Act 2018, which provided the remission of all tax liabilities for tax periods before 1 January 2010. This meant that taxpayers were not required to file outstanding tax returns or pay outstanding tax liabilities for tax periods before 1 January 2010. A total of $10.4 million (tax and additional tax) was remitted for tax periods prior to 1 January 2010.

During the course of the Tax Amnesty period, Revenue Management Division received 1,182 Tax Amnesty applications and $21.8 million in core tax was assessed from tax returns filed under the Tax Amnesty. Payments totaling $19.4 million for core tax were paid with another $2.4 million in tax currently under payment arrangements. A total of $12.4 million of additional tax was remitted as a result of the Tax Amnesty applications.

Tax Amnesty Original Team cropped

19 June 2019

Shipping Subsidy 2019

Two subsidised voyages to the Northern Group to support the Palmerston House opening

The Ministry of Finance and Economic Management (MFEM) today announced that the Cook Islands Government has agreed to provide Taio Shipping with a subsidy for two voyages from Rarotonga to the Northern Group to coincide with the opening of the Palmerston House in Rarotonga in early July 2019. This subsidy follows in the footsteps of the Northern Group pilot shipping subsidy project implemented by MFEM in 2018 with vessels operated by Cook Islands Towage and Taio Shipping. 

Palmerston House is owned and operated by the Palmerston Charitable Trust and has been built with funds mobilised by Palmerston families on Rarotonga and in New Zealand and Australia. The House will provide a central base and much needed accommodation for Palmerston families when visiting Rarotonga. Palmerston House is scheduled to be officially opened on 8 July 2019.

“To help celebrate this important event, the Government is delighted to be able to assist the Northern Group communities to transport their contributions such as fish, uto and pare rito”, Financial Secretary Garth Henderson, said.
The first voyage, on the MV Lady Moana, to Penhryn, Rakahanga and Manihiki is expected to leave Avatiu Harbour on Friday 21 June 2019. The second, on the MV Grinna, to Palmerston, Nassau and Pukapuka is expected to depart on Saturday, 22 June 2019. Both vessels are expected to be back in Rarotonga in time for the opening ceremony.

The subsidy funding, equivalent to 60 percent of expected operating expenditure for each voyage, has been made available from the 2018/19 Budget Inter-island Shipping Subsidy appropriation administered by MFEM. The overall objective of the subsidy program is to improve the regularity, reliability and affordability of shipping services to the Northern Pa Enua. 

The Government intends to extend the shipping subsidy in the 2019/20 financial year, and has appropriated $500,000 in the 2019/20 Budget for this purpose.

Future inter-island shipping plans

The Government’s longer-term goal is to provide a regular, reliable, modern, efficient and safe interisland shipping service. Recognising that a shipping subsidy is only suitable as a temporary measure that will not in itself achieve this goal, the Government flagged two additional measures in the 2019/20 Budget. 

Landing craft cargo vessel 
The first is $2.5 million of Cook Islands Government funding for the procurement of a medium-sized landing craft vessel, with crane facilities, designed to transport heavy equipment and construction materials. The landing craft will support the implementation of the Government’s planned Pa Enua infrastructure projects over the 2019/20 estimates and forward budget period. 
The procurement of the landing craft vessel, and arrangements for its operation, will be subject to the standard Government Procurement Policy. This sets out a fair, transparent playing field for public procurement where everyone has a fair chance of bidding for public goods and services and provides competitive pricing to ensure value for money for the tax payer dollar. 

Purpose-built passenger/ general cargo vessel
The Government has requested support from the Government of Japan in developing a project to deliver a purpose-built shipping vessel that will provide passenger and general cargo inter-island services.
The Government anticipates that this will be a two-stage project. Stage 1 will deliver a comprehensive business case to inform a Government decision on proceeding to Stage 2. The second stage would involve funding arrangements, detailed design, construction and operation of the vessel. While discussions are at an early point, $250,000 of ODA funding has been allocated for 2019/20 in anticipation of Stage 1 technical assistance from the Government of Japan.

19 June 2019

Deposit Instrument of Accession with World Customs Organisation

On Monday 13th May 2019, at the Oceania Customs Organisation annual conference held in Saipan, Commonwealth Northern Mariana Islands CNMI, the Cook Islands became the second non-World Customs Organisation member, and the 118th country to accede to the Revised Kyoto Convention.

The Cook Islands was represented by Associate Minister of Finance, the Honourable Tingika Elikana who deposited the Instrument of Accession on behalf of the Cook Islands Government.


Associate Minister of Finance Honourable Tingika Elikana deposits the instrument of Accession
with World Customs Organisation Deputy Secretary General Mr Ricardo Trevino

The Revised Kyoto Convention is the global blueprint for the simplification, harmonization and modernization of customs procedures. The original Convention was concluded in Kyoto in 1973 and entered into force in September 1974. It was reviewed over a period of years and amended in 1999.

In June 1999, the Council of the World Customs Organisation approved the Revised International Convention on the Simplification and Harmonization of Customs Procedures Revised Kyoto Convention. The Revised Kyoto Convention has been developed in the face of mounting pressure from the international trading community to minimize the level of customs intervention in cargo movement and to maximize the level of trade facilitation. The Revised Kyoto Convention came into force on Feb 3, 2006.

The Revised Kyoto Convention has the following objectives:

  • Eliminating divergence between the customs procedures and practices of Contracting Parties that can hamper international trade and other international exchanges;
  • Meeting the needs of international trade and Customs for facilitation, simplification and harmonization of customs procedures and practices;
  • Ensuring appropriate standards of Customs control; and
  • Enabling Customs organizations to respond to major changes in business and administrative methods and techniques.

The Revised Kyoto Convention incorporates important concepts of contemporary compliance management. These include the application of new technology, the implementation of new philosophies on customs control and the willingness of private sector partners to engage with customs authorities in mutually beneficial alliances. Central to the new governing principles of the Revised Kyoto Convention is a required commitment by customs administrations to provide transparency and predictability for all those involved in aspects of international trade. In addition, the customs administrations are required to:

  • Commit to adopt the use of risk management techniques;
  • Co-operate with other relevant authorities and trade communities;
  • Maximize the use of information technology; and
  • Implement appropriate international standards.

The revised Convention benefits many people. Traders will benefit from improved facilitation and reduced costs. Shippers and transport operators will benefit from uniform Customs control and quicker movement of cargo and people. Government will benefit from more effective controls that increase border security and reduce revenue leakage. In summary, Revised Kyoto Convention will provide international commerce with the predictability and efficiency that modern trade requires.

7 June 2019