Kiribati’s Tax System
Kiribati follows a comprehensive tax system that combines direct and indirect taxes. The main direct tax is income tax, which taxes the worldwide income of Kiribati residents, while non-residents are taxed on their Kiribati income. The flat tax rate of 20% applies uniformly to businesses, residents, and non-residents of all sizes and industries.
In addition, there is a Value Added Tax (VAT) system introduced in 2014. Currently set at a rate of 15%, the VAT applies to almost all goods and services.
Kiribati’s Business Environment
Despite a lack of natural resources, Kiribati has an open economy that encourages active participation from foreign companies in the market. The economy relies on imports, and the export of fish products and international aid plays a prominent role, making them central to the economy.
Most businesses in Kiribati are small and medium-sized enterprises (SMEs), primarily operating in the commercial and agricultural sectors. Thanks to progressive tax policies, these businesses thrive and contribute significantly to the national GDP.
Investment Opportunities and Incentives
Kiribati is a member of the Multilateral Investment Guarantee Agency (MIGA), which protects foreign investments from political risks. It offers various benefits for foreign investors, including depreciation allowances for the decline in value of products, plants, and equipment, as well as investment tax incentives.
Additionally, the government is interested in developing partnership opportunities with foreign investors in industries such as commercial agriculture, fisheries, and tourism.
Tax Administration
The Kiribati Revenue Equalization Reserve Fund (RERF) is responsible for managing domestic tax affairs. It ensures fair tax collection and compliance among taxpayers.
In summary, Kiribati presents an attractive outlook for those looking to conduct business or invest in a stable financial environment. As this small island nation develops financially, Kiribati’s tax system and business environment form an important window to view the country’s economic potential.
Related Links:
Kiribati Ministry of Finance and Economic Development
Kiribati Official Government Portal