A local economist, speaking on the condition of anonymity, has warned the government that the recent reduction in import duties would have serious economic effects to the country."It is amazing to note that the import duties were reduced very early this year, it is unclear to me why the Government chose to do such a thing."
"The Government has already signed up to the Pacific Island Countries Trade Agreement, commonly known as PICTA, and part of the condition in PICTA is a reduction in import duties by an agreed percentage."
"Currently the Solomon Islands has put its import duties at 10%, by way of comparison Fiji has its import duties at approximately 40%, if we were to reduce our rates to comply with PICTA we would be one of the biggest losers in the Pacific Region," said the local economist. "We might as well import goods for free."
The local economist went on to say that the government must re-look at its rates because not only is the Solomon Islands foregoing huge amounts of money, it is also setting itself up for huge disappointments when PICTA comes into effect.
"I think whoever was assigned to set up the import duty has a responsibility to explain to the public why he chose to peg the rate at 10%."
"It is a huge risk and I must reiterate that the Solomon Islands will loose out if PICTA was implemented tomorrow, but as it is we still have time to reverse the situation."