Finance and Treasury Minister Gordon Darcy Lilo has ordered the immediate termination of all Memoranda of Understanding (MoUs) relating to tax exemptions in the mining, forestry and fisheries sectors, a move aimed at strengthening fiscal governance and ensuring compliance with existing laws.
In a statement issued on June 17, the Ministry of Finance and Treasury said the decision closes fiscal loopholes and reinforces legal processes governing the approval of tax exemptions.
According to the ministry, authority to grant tax exemptions rests solely with the Revenue and Customs Exemption Committee under existing legislation. While finance ministers may have signed MoUs relating to fiscal arrangements in the past, the ministry said such agreements do not constitute a legally valid mechanism for granting exemptions outside the statutory process.
“Any fiscal arrangements previously covered under MoUs will no longer be recognised,” Lilo said.
All companies operating in the mining, forestry and fisheries sectors have been directed to comply with existing legislation and regulations and to submit any future exemption requests through the Revenue and Customs Exemption Committee.
The ministry said the measure is intended to improve transparency, strengthen public revenue management and ensure that all investors are subject to the same regulatory framework.
The decision follows a broader push by the Ministry of Finance and Treasury to tighten fiscal controls and strengthen revenue administration. In May, Lilo directed that all tax exemption applications be processed exclusively through the Revenue and Customs Exemption Committee, stating that requests submitted directly to the minister's office would no longer be considered.
On the same day as the MoU termination announcement, the ministry also ordered the suspension of pre-release arrangements for goods at ports, container terminals and bonded warehouses as part of efforts to strengthen customs controls, improve compliance and reduce revenue leakages.
The latest measures signal a wider government effort to improve fiscal discipline, enhance accountability and ensure tax concessions are granted only through established legal channels.
Officials said the move is expected to help safeguard government revenues while creating a level playing field for investors operating across the resource sector.
The decision could affect companies that previously relied on MoU-based fiscal arrangements, requiring them to seek any future tax exemptions through the formal approval process administered by the Revenue and Customs Exemption Committee.
The ministry said the reforms form part of ongoing efforts to strengthen economic governance and ensure public revenues are protected as Solomon Islands continues to pursue sustainable economic development.
