The increase of rates of business operating license fees in 2023 by the Honiara City Council (HCC) raises concern about the impact on businesses operating in Honiara city and the wider economy.
“We have already seen evidence on the risk of a slowdown in economic activity, so there is concern about the impact of higher rates from the Council especially on business licensing,” Chief Executive Officer (CEO) of the local business Chamber, Ms Natalina Hong, said.
Representatives of the Solomon Islands Chamber of Commerce and Industry (SICCI), led by the CEO met with HCC officials on early February 2023 purposely to raise concerns from members and better understand the current increase in business licenses fee faced by the private sector.
SICCI, as membership driven, not for profit peak body representing private sector, seeks to better understand the situation and engage with HCC to better so that it can communicate information to its members of the private sector.
SICCI, which currently has a membership of 220 businesses, have been receiving concerns recently from members regarding the changes on business license fees from HCC.
Ms Hong said on behalf of their members SICCI attended the meeting with the objective to understand more the basis of the current changes in business licenses fee, provide awareness of challenging business environment and propose ways the Chamber and HCC can collaborate to disseminate timely information on changes that will affect the business community.
As a Chamber, we are looking at ways SICCI and HCC can engage with outcome that benefits both parties seeing as this is an important year for HCC with the country’s hosting of the Pacific Games in our capital.
Also of concern for the Chamber is the lack of consultation with businesses on the increased rates.
“Consultation is key and businesses are concerned of the fact that private sector was not consulted of these changes up to 50% increase in business licenses fees. Businesses need to be consulted in matters that have the potential of affecting their operations so that they can be aware of the changes and reasons for the changes,” Ms Hong said.
Businesses are not clear on what the basis of the increased rates are, especially the licensing, at a time when the cost of doing business is already high coupled with the lack of business-friendly services provide in the city.
From the Chamber’s perspective since 2019, most businesses are yet to gain grounds lost from the impact of COVID-19, the 2021 Honiara riot and burning down of properties and the lockdowns.
SICCI surveys shows that businesses have lost millions of dollars since the outbreak of COVID-19 lockdowns and recent riot in Honiara. Even with the opening of the borders in July 2022, recovery is slow and risks are still high for business given an already tough business environment before the past two years of disruptions and pandemic.
“Any increase of fees and charges on business licenses may hugely shock businesses. This is the reason why SICCI has pushed for consultation with the private sector and advocacy for understanding of the business environment in Honiara.
“If there is going to be any increase, there must also be communication from HCC to justify why changes takes place, what are the reasons and if there are chances to consider few waivers for some sectors, and indigenous Small and Medium Enterprises, who are more severely affected than others,” SICCI CEO, Ms Hong, said.
HCC’s Deputy Treasurer Mathew Tuanivalu told the meeting HCC changes the business licenses fee after every five years.
“In 2023 HCC will be tough on enforcing business licenses fees as the country and our Capital City heads towards hosting the 2023 Pacific Games, as well as the growing strain due to increasing city population and HCC operation costs to meet the demands of providing services to a growing demand such as rubbish collection.
“The support grant from the National Government to HCC has not able to meet the budget needed and the changes of licenses fees will enable HCC to meet some overhead costs,” he said.
HCC’s Senior Legal Officer, Paul Inifiri said under HCC Ordinance, they can make changes on rates and charges annually.
“However, HCC has been sincere to businesses over the years with small fee charges, however businesses should be aware that business licenses fees will be reviewed and changed after five years. The current changes to rates is just below 50% charges and HCC Ordinances is silence on consultation about any changes that HCC has enforced,” he said.
SICCI CEO, Ms Hong said if HCC considers overhead costs and hosting of the Pacific Games as driving factors which leads to the increase in business licenses fees, SICCI request HCC to channel information to the private sector to make them aware them of the changes and the reasons for changes.
“SICCI looks forward to continued engagement with HCC so that such vital information can be channelled down to businesses through the Chamber network.
"Businesses understand the importance of paying pay taxes and business fees to enable authorities of Honiara city to operate and provide services, all we seek is consideration on timely notices to able business to prepare.
"The expectation now is that with the increase fees the proper services and efficient management of the city utilities will also improve, for businesses and city dwellers.
“SICCI’s approach is to consult with responsible authorities and provide further opportunities for education on issues affecting businesses and the private sector and explore ways of working collaboratively in addressing these issues with the interest of both sides considered,” she said.
Source: SICCI Media