Republic of the Marshall Islands: Technical Assistance Report-Consumption and Income Tax Reform

Technical Assistance Reports, February 28, 2025

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Canonical URL: Republic of the Marshall Islands: Technical Assistance Report-Consumption and Income Tax Reform

The report provides analysis and advice on tax policy and administration reforms to modernize and improve the income and consumption tax system.
On consumption taxes, the key recommendation is to replace the current system that is based on import tariffs, a business turnover tax, and local sales taxes, by:
- a more efficient and equitable system with a broad-based value-added tax,
- selected excises to address externalities, and
- a profit tax.
On income taxes, the report recommends base broadening and simplifying the rate structure.

Replace the current consumption tax mix (import tariffs, business turnover tax, local sales taxes) with a broad-based value-added tax.
Introduce selected excise taxes targeting externalities.
Implement a profit tax as part of the reformed consumption tax framework.

Subject: Consumption taxes, Income and capital gains taxes, Revenue administration, Tax administration core functions, Taxes, Value-added tax
Keywords: administration system, Asia and Pacific, capacity development mission, Consumption taxes, Corporate income tax, Global, gross revenue, Income and capital gains taxes, income tax reform, Marshall Islands consumption tax, Marshalls energy company, Pacific Islands, Personal income tax, profit tax, reform management governance, Republic of the Marshall Islands., schedule reform option, Tax administration core functions, tax administration issue, Turnover tax, Value-added tax

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