The Vanuatu Chamber of Commerce & Industry (VCCI)acknowledged the work currently being done at the Bauerfield international airport runway. The damage to the runway and the refusal of a few airlines to land at the airport caused a lot of businesses to suffer. However now that several airlines apart from Air New Zealand began flying into Port Vila again, tourist numbers are rising again. There are a few New Zealand experts that are currently on the ground examining the drainage system along the runway. They will be providing views on how appropriate to upgrade the drainage system to ensure the runway when renovated will last longer. The World Bank and the Vanuatu Government will be signing a contract this year to enable the full renovation of the runway to begin early next year, 2017. When the renovation works on the runway kicks off early next year, there may be a few disruptions to flight schedules however the Airports Vanuatu Limited (AVL) will be in consultation with the airlines and other stakeholders concern to minimize any flight disruptions to ensure normal flights continue. Air New Zealand has yet to confirm a date when it will resume its flights into Port Vila. There are ongoing discussions that the Bauerfield and Pekoa international airports will be upgraded to Code E to gather for larger aircrafts or long hauls while the Whitegrass airport in Tanna will be upgraded to Code C.
We are half way through the year. How is your business going? What have you achieved so far? What challenges have you overcome and what are you proud of? What do you want to achieve for the rest of the year?
We regularly check our bank balance and our business stock and resources, we put fuel in our vehicles and make sure the engine is properly tuned yet how often do we stop and review our business progress.
I often hear business owners and leaders complain about being too busy and not having enough time for the important things – what can be more important than making sure our business does not run out of fuel!
We need to be constantly reviewing our plans and if necessary fine tuning them to get maximum performance, just as we would with an engine.
We need to be constantly demonstrating our care of our people. We need to make sure they are properly trained and supported and that they are fully engaged as active team members. Disengaged staff cost us a lot of money!
We need to be treating every customer as special – we want a whole army of raving fans out there telling others what a wonderful business we are.
We need to ensure that our business systems and processes are up-to-date and fit for purpose – businesses waste an enormous amount of money on propping up systems which are way past their sell-buy date and which no longer add value to the business.
We need to make sure that we are leading from the bridge and that we have a committed, engaged and capable team in the engine room!
It is time to take stock of our business progress in 2016. We need to pull back from the day to day activities of making money and engage in some reflection on how we are making money! Are we working harder and harder doing longer and longer hours or are we working smarter?
We can only work smarter if we have created some clear plans in the first place – we need to know where we are going and what it will take to get there.
Follow this 6-point plan to help you review business progress at this mid-point of the year.
- Ask your staff to identify what they feel has been achieved so far this year
Our staff probably think much more about the business than we give them credit for. They are at the sharp end and they see what is happening and what could happen. We often take them for granted and just don’t ask them for their opinions.
- Find out what is worrying or challenging your staff at the moment
This is not about encouraging people to moan and complain but unless we really know what is causing problems or challenges for the workforce then we can never find ways of improving things. We need to engage all our people in a culture of continuous improvement.
- Go out and actively seek feedback from your customers and suppliers – what do they like or dislike about your business?
In my experience customers love being asked what they think and it gives out the message that you care about their opinions – after all they do pay your bills!
- Write down your own feelings about your business so far this year. What are you proud of and what disappoints you?
Don’t fall into the trap of asking everyone else but forgetting yourself – you might find it useful to talk to a colleague or friend or mentor. Not talking is not an option!
- Think about all this feedback. What is it telling you? What changes, if any, do you need to make to your plans for the rest of the year?
All feedback, however painful it is to hear, is a gift in that it gives us a chance to put things right but we have to be receptive to feedback and to the comments of others who may well see our business differently to ourselves.
- Let people know what you have decided – get them on board!!
Smart business leaders engage people in their business journey and make twists and turns in that journey when it is necessary. They are aware, reflective and future focussed.
By using this simple 6 step process twice a year you will be more likely to have a fine tuned business that runs efficiently and smoothly in most conditions.
Chris Elphick is Director of Learn.fast Pacific, supporting the development of a range of businesses and organisations in Vanuatu and other Pacific countries. He is an experienced business mentor and has years of experience of working with Small & Medium Enterprises. He works in Vanuatu as a mentor, coach and trainer.
If you have a business issue for Chris to comment on please contact him at firstname.lastname@example.org
Representatives of government officials, Chambers of Commerce, National Youth Councils and Young Entrepreneurs from five Pacific island countries met in Suva, Fiji from 29 June to 2 July 2016 at a Regional Young Entrepreneurs Forum to discuss a few strategic approach for youth entrepreneurship aimed at increasing investment in youth. The meeting recognizes that youth employment and entrepreneurship is the biggest issue that affects young people in the Pacific today with average youth unemployment rates at 23 per cent. The representatives were from Samoa, Solomon Islands, Tonga, Vanuatu and Fiji. The Vanuatu Chamber of Commerce & Industry (VCCI) was represented at the meeting by Mr Stanley John Fred, a young finance business trainer at the VCCI.
The meeting re-examined the existing Pacific Youth Development Framework which targets four broad outcome areas however more emphasis were based on the need for more young people to have secured decent employment and the need for young people to have increase access to relevant education and training in formal and vocational sectors as well as involving more youth in entrepreneurship.
During the discussions, issues that need support were mentioned which included from across the region there are significant gaps between the skills young people acquire through formal education and the needs of employers and the wider economy, Pacific governments and development partners recognise these challenges and are devoting significant efforts and resources to improve labour market institutions, capacities of training institutions to engage with emerging labour market opportunities needs to be improved, strong political will is needed to address youth unemployment and the diverse impact of youth unemployment means there is often no clear policy leader in addressing the issue from a government perspective.
All participating countries were asked to draft their national action plans on how appropriate to deal with youth entrepreneurship and Vanuatu came up with the need for support, both financial and expertise, in holding the First National Youth Employment Forum as a first step in consolidating discussions and policies on youth entrepreneurship and a request for regional stakeholders such as PIPSO, Fiji Young Entrepreneurs Council, successful young entrepreneurs such as Hands on Harvest, POETCom (Pacific Organic & Ethical Trade Community) and SPCthat presented in the Regional Young Entrepreneurs Forum to also present at this First National Youth Employment Forum.
Further consultations will be held locally among collaborating institutions including donor partners to see when the first National Youth Employment Forum will be held.
A note to all interested participants of the 2016 Wik blong Vanuatu Trade Fair.
As mentioned in previous meetings, the Vanuatu Chamber of Commerce and Industry (VCCI) who is coordinating the famous event of the Wik blong Vanuatu in New Caledonia, has set a limit of participants to 60. The VCCI would like to state that it has already reached the target of 60 participants. Sixty participants have fully paid their registration fees and the VCCI cannot afford to take more because of the budget restriction.
Again the main aim of this trade fair is not only to exchange cultural and business aspects but also to promote Vanuatu tourism amongst the New Caledonian public.A range of Vanuatu local products will be displayed by the 60 participants such as local spices, handicrafts and carvings.
The VCCI will be contacting the confirmed 60 participants early next week to organize meetings with them.
Dear VCCI Members,
Read below an email from Pacific Island Private Sector Organization (PIPSO) on E Commerce for Women in Business:
In an effort to support Pacific females in business, 12 women from Fiji, Samoa, Tonga, Solomon Islands and Vanuatu are being given the opportunity to undergo PCF Grow Project training, supported by the United Nations Development Programme (UNDP) in collaboration with PIPSO and PCF. Participants will be put through 10-weeks of training – all of which will be online and conducted by James.
The business women will be selected through a process implemented by PIPSO. The women will be a mixture of those who do not have an online presence and those who do but have had challenges in fully utilizing their websites and social media presence for sales and marketing.
There will be no cost required in setting up websites for participants, however each candidate would be required to pay for Shopify Shore.
We are inviting expressions of interest for female business owners looking to improve sales via training provided by the Grow Pacific project.
· Business principal(s) must be female and based in Fiji, Samoa, Tonga, Solomon Islands and Vanuatu
· Have an existing product or range that can be sold and fulfilled via a website
· Be available for weekly online training and support sessions
Please let interested female participants complete this online form to submit their application: http://www.growpacific.com/form-grow-pacific-participants/
Dear VCCI Members,
Read below, an email from Pacific Network on Globalization (PANG) who is calling for endorsement of a report based on the assessments made so far on PACER Plus :
On August 26th, Trade Ministers from around the Pacific regional, including Australia and New Zealand will meet in Christchurch NZ to sign off on controversial free trade deal known as PACER-Plus deal.
Civil Society Organisations from across the Pacific region, Australia and New Zealand have long held concerns about the impacts of PACER-Plus and those concerns appear well founded given the assessment in “Defending Pacific Ways of Life: A Peoples Social Impact Assessment of PACER-Plus”. A copy of the report can be downloaded from the link below.
The Peoples Social Impact Assessment was commissioned as a direct respond to the Office of the Chief Trade Advisors (OCTA’s) hastily organised and flawed impact assessment of PACER-Plus. The report comes after years of negotiations with the OCTA to ensure that a comprehensive and independent SIA would be undertaken.
A small working group of civil society actors have explored all the options including taking the matter directly to Pacific Forum Leaders meeting for consideration, and have agreed as a first step to endorse the this report and urges your organisational support for the attached civil society letter to governments, demanding that no agreement to conclude PACER-Plus is taken at the Christchurch, Special Trade Ministers meeting.
We also welcome individual endorsements. Please send organisational/ individual endorsements to: email@example.com no later than Friday the 15th of July, 2016.
For further information or clarification please contact: firstname.lastname@example.org
We would appreciate it if you could kindly send to your networks. Please do not share on social media.
The validity of VCCI’s proposed Certificate III in Business and Certificate III in Finance was the focus of a stakeholder validation workshop held at the Chamber of Commerce on Monday 6th June 2016. A group of twenty selected stakeholders, comprising business owners, industry bodies, employers, community groups, government and training and education representatives, were involved in the workshop.
The workshop was part of a series of activities involved in the process of ensuring that the characteristics of the proposed courses as well as its individual components meet the needs and expectations of the stakeholders and is also technically correct.When stating the purpose of the workshop during the introduction, the VCCI Training and BDS Manager explained “We consulted with you in 2015 to inform the focus, structure and content of these courses, now we are here to confirm that what we have developed is certainly what you wanted”.
VCCI’s proposed course are intended to meet the needs of micro, small and medium enterprise businesses to respond to the challenges they face and the concerns they have about future business growth and success that could be addressed with skills development through training. The Certificate III in Business is intended to develop an individual’s competencies on how to manage and operate a micro/small business. The Certificate III in Finance is intended to develop an individual’s essential accounting and bookkeeping skills to manage finances for a small business or organization.
The workshop involved presentations on the courses’ descriptors by the VCCI course development team followed by a focus group assessment by stakeholders, organized into sub-groups with specific areas of focus. Each sub-group had a course development team member with the role as moderator who guided the group’s discussions. Sub-groups assessed and discussed on the courses’ nomenclature, qualification description, outcomes, technical structure and rules, delivery and assessment strategy and requirements and units of competency.
The workshop identified and proposed some needed changes to the courses’ descriptors and their characteristics and individual components. The course development team is now addressing feedback from the validation workshop and will prepare final draft descriptors for stakeholders’ endorsement of the courses.
Panelists from left Boletawa (AFI), Hudson (Bred Van), Ricky (ANZ Van), Cocker (RBT), Tari (RBV) & Wahid (Malaysia)
The Pacific Islands Regional Initiative (PIRI) inclusive finance meeting that was held at the Holiday Inn from 1 to 3 June 2016during one of its session on Support SME Finance recognizes the fact that the Small and Medium Enterprises (SMEs) are the backbone of the national economy in any given country and is a critical component of growth. Development of the SME sector brings inclusive economic growth to a country through job creation. Broadening access to economic and business opportunities for traditionally underserved socio-economic groups in the region including low income households and SMEs can improve social welfare and boost national productivity. Developing a holistic and coordinated framework is crucial to promoting the development of the SME sector. Financial institutions play a particularly important role in driving this agenda. Developing innovative financing models that go beyond traditional bank lending is crucial to providing timely financing opportunities for SMEs based on their needs and stages of business growth.
Ms Lisa Wahid, the Deputy Director of the Bank Negara Malaysia, gave a lengthy but notable speech on what Malaysia is doing to assist the development of SMEs. She stated that the Malaysian government works together with the local financial institutions to ensure businesses are adequately assisted. She mentioned five pillars that financial institutions in Malaysia have developed, are working on and are continuously reviewing to ensure demands are met. The pillars are financial infrastructure, finance & guarantee schemes, avenue for obtaining information, data management and outreach/awareness programs. To ease SMEs accessing loans in Malaysia, a consolidated loan application form agreed to by all banks is used so when a bank does not accept a loan application form, the sameform containing the same information can be given to other banks. She stressed that the Pacific, as a group, can adopt the Malaysian model.
Experiences from players in the banking sector in Vanuatu shows that the SME market is quite small which affects lending. The cost of doing business is high when lending out to SMEs and with that comes a great amount of uncertainty. Some local commercial banks have embarked on some loan educational and mentoring programs whereby accredited bank officers work with entrepreneurs on developing needed banking information such as business plans to ease loan approvals.
Experiences from around the Pacific shared similar concerns faced by players in the banking sector in Vanuatu. All were in agreement that there is a need for a proper definition of SME in the Pacific, there is a need for banks to be present in the rural areas/islands to serve the unserved, there is a need for financial literacy to be incorporated into school curriculums to promote entrepreneurship at early age and there is a need to have a regional SME bank to assist SMEs in the Pacific access needed funds.
On 30 May 2016 the Vanuatu Chamber of Commerce & Industry (VCCI) wrote a five page letter to the Prime Minister of Vanuatu, Honourable Sariboh Charlot Salwai Tabimasmas, outlining a few recommendations that the private sector reckon the government of the day should embark on and/or consider to ensure a speedy turnaround of the nation’s struggling economy.
To improve the tourism sector the VCCI recommended to the PM that the VIPA fees for business renewal and new application be reduced to VT 10,000 and VT 20,000 respectively. This is to encourage foreign investors to invest accordingly in this time of uncertainty. Moreover the VCCI wants the Unions not to harass the hotel, resort and restaurant management teams since everyone is in a recovery mode. The VCCI would like to encourage the local commercial banks to give grace periods on loan payments to businesses at this difficult time as well as the government should move quickly to finalize the airport upgrade plans with the World Bank to get Air New Zealand and Qantas to resume normal flights to Port Vila and promote cheaper airfares on Air Vanuatu to entice tourists to return to Vanuatu.
To ensure the finance sector improves the VCCI recommended that the government should support the “Boar Tusk” initiative by retaining Resolute Outcomes as consultants to lobby for Vanuatu’s return to the FATF white list and to provide a draft legislation to make Vanuatu FATF/APG compliant. The VCCI is also recommending that the Financial Intelligence Unit be moved from the State Law Office to the Reserve Bank. While the current government is getting credit for making the taxation review a priority, caution has to be taken not to rush it because it may affect the existing businesses as well as potential investors. After learning that a proposed income tax legislation has been drafted, the VCCI is recommending that a cost/benefit study has to be undertaken on this tax initiative first before a proposed income tax legislation is drafted.
To assist the small and large commerce sector recover the VCCI recommended that the government guarantees that funding from donors intended to help the private sector to rebuild must reach the private sector. The VCCI also recommended that the government outsourced contracts to the private sector as a genuine stimulus to the economy. The government has increased the company re-registration fees from VT 10,000 to VT 60,000 a 600% increase which the VCCI reckons is not acceptable in this difficult time. The VCCI recommended that the company re-registration fees should be increased to VT 20,000 but not VT 60,000. The VCCI also recommended that civil servants should be more efficient and helpful at this time of difficulty. Lastly to help this particular sector the VCCI recommended that the company tax and income tax being talked about should be deferred to 2018 to allow existing businesses time to fully recover and potential investors’ time to get established.
To give confidence to businesses in the agriculture sector the VCCI recommended that Section 12 of the Industrial Development Act must be deleted as it is hindering primary production as well as the government should relocate the Blacksands fish processing plant to Palekula in Santo since Mele Bay has the potential to develop further its tourism status.
For small manufacturing businesses the VCCI recommended that the Industrial Development Act be revised in its entity and review tariff protection policies which are causing loss to industries. Moreover the VCCI recommended that to assist the aviation sector the government and the World Bank must upgrade the Bauerfield airport to Code E and have an Airport Master Plan in place for implementation.
To improve the land transport services the VCCI recommended that the Public Land Transport Authority’s (PLTA) budget be approved at the next parliament session for the establishment of the PLTA office as well as the government should have in place available funds to compensate businesses for man-made disasters such as the runway issue.
To ensure the shipping sector delivers adequately as expected the VCCI recommended that a new Shipping Act be passed to replace the current outdated one. The new Act should be based on the South Pacific Community regional model which most Pacific countries have adopted. More-so a new Maritime Act be passed as well to reflect the current international standards. The VCCI reckons a Committee be created composed of public and private reps to guide the maritime industry in its operations and standards.
In order to upgrade the builders skills’ in the Building sector the VCCI recommended that the government should recognize the local building industry by subsidizing building materials and providing a budget to the Vanuatu National Builders & Allied Industries Association (VNBAIA). Moreover all MOUs signed by the government and aid donors in relation to building must ensure that local builders are sub contracted to do specific jobs, certified individual builders are hired and only highly qualified professionals from overseas are recruited. The VIPA must ensure that all incoming building investors be registered with the VNBAIA. A Vanuatu Building Standards Council must be established to ease the compliance of building standards and supervise the performance of building technicians. Other players in the building scenario such as the NGOS, Labour Department, Customs Department and the Ministry of Infrastructure & Public Utilities must ensure that local builders are hired to carry out donor funded building projects, hired laborers from outside Vanuatu must have the consent of the local building industry, from 2017 onwards all building licensees must register with the VNBAIA and all government building and repair projects be given to local builders as first priority.
The VCCI is recommending on behalf of the Public Utility sector that the government should open and use a permanent alternate road to the airport from town via Bellevue before major road operations by the RMS begins and starts to disturb normal business activities.
Other recommendations that the VCCI made to the PM were the government needs to provide a detail report on how donor funds that came in after cyclone Pam were spent, feasibility studies have to be done before establishing satellite cities, feasibility studies have to be done before introducing new taxes such as income tax, payroll tax, etc, the Industrial Development Act has to be entirely reviewed, the APRA Bill is not needed as it duplicates activities stipulated in the reviewed Biosecurity Act and Agriculture Bill and the Agriculture Bill should be tailored more into standards and export certification rather than statistics collection.
The VCCI recommended that a more realistic unemployment plan is redundancy payment by the employer equal to 1 week’s pay per year of service capped at the equivalent of 3 months’ salary, increasing employers’ VNPF contributions by 2%, increasing employees’ VNPF contributions by 2% and the ability to draw down an unemployment entitlement from VNPF.Employers would be able to hire more staff – unemployment entitlements would be funded as accrued, so any unemployment payments would not threaten the continuation of the employer.Employees would have more security around payment of benefits because employers would have accrued funds for the purpose, and because unemployment entitlements would be paid by VNPF.Lastly but not the least on the leave entitlements the VCCI recommended that there should be a flat rate of annual leave at a level similar to other Pacific Island countries, employers propose 15 days annual leave which is still more generous than most Pacific countries and on maternity leave there should be a set rate where the employer funded maternity leave at a level similar to other Pacific Island countries, employers propose 12 weeks maternity leave at 50% of regular salary which is still more generous than most Pacific countries, in the medium term move from direct employer funded maternity leave to a system of national maternity insurance, with people contributing to a maternity insurance levy to VNPF and the VNPF administering the payment of maternity benefits. On sick leave there should be a set amount of sick leave at a level similar to other Pacific Island countries and employers propose 10 days sick leave which is on par with sick leave provided in other Pacific countries. Statutory leave benefits would not threaten the continuation of an employer’s business, employers would be able to hire more staff, more job opportunities for all and female employees would not be discriminated against due to the burden of employers having to directly pay maternity leave.
Land Leases Act requires registered proprietors of urban leases to pay five percent (5%) on increases in unimproved values to the Minister of Lands (Lessor) on transfers.
(1) As of 27 February 2015 a registered proprietor of an urban lease must pay to the Minister of Lands, on behalf of the people of Vanuatu, a payment representing five per cent (5%) on the increase of unimproved value of his or her land at transfer. The payment is imposed by section 48B (1) and (2) of the Land Leases Act [Cap 163]. The relevant section reads as follows “48B Payment for transfer of urban lease (1)… (2) If a proprietor of an urban lease transfers that lease, the proprietor must pay to the lessor 5% of the difference in amount between the unimproved market value of the land at the time it was purchased and the unimproved value of the land at the time of the present sale.”
2. The payment to the Lessor (lessor’s benefit) was first enacted by Parliament in Land Leases (Amendment) Act No. 11 of 2004 but was restricted to the transfer of rural leases. By that amendment a lessee of a rural lease was to pay not more than 18% of the transfer consideration to the lessor unless the lessor and lessee have entered into other arrangements.
3. After it was effected for 6 months Amendment no. 5 of 2007, not only reduced the rate to not more than 10%, but also it was considered fairer to restrict it to the difference in the unimproved value of land at last sale and current sale. Still it was restricted to rural lands.
4. By Amendment no. 35 of 2014 the rate was fixed at 10% for rural lease transfers and the lessor’s benefit policy was extended to transfers in urban leases.
5. The rationality of the policy, amongst others, are:
(a) The Minister of Lands, by discretion or on account that an occupier had occupied a land prior to Independence, had leased land without premiums. This is considered unfair to the people of Vanuatu. Unfair land dealings was a fundamental issue in recent land reform exercises.
(b) It was only recent (2004) that Land Leases (Amendment) Act no.11 of 2004 required the Minister of Lands to charge premiums at 35 % of unimproved values for grant of new leases and premiums for extensions at 10%. From 2009 premiums are assessed using contract rents and full rental values prescribed by Order of the Minister dated 19 August 2009.
(c) Once land enters the public domain in the form of lease it could be sold on the open market at market value. Market value of lands continue to increase in almost all subsequent lease transfers. Most leases have had changed hands multiple times, many without any development whatsoever. Comparatively lessors do not receive economic benefit from subsequent sales except minimal fees and annual rents.
(d) Hence the payment to the Minister of Lands (Lessor) on urban land transfers is part of the matrix to address the obvious economic deficiencies to lessors in land leasing.
(e) Why 5% and not 10% as fixed for rural leases? The reason is that the Minister of lands collect registration fees on transfers and holders of urban leases have to pay other taxes, including property tax, unlike rural leaseholders.
6. The Lessor’s benefit is applicable to any urban lease at date of transfer and whose unimproved value at the present sale is higher than the unimproved value at date of last sale. “The unimproved value definition assumes that a land is notionally in its natural or virgin condition but it possess whatever advantages that exist as a result of extrinsic circumstances, such as roads, public services, amenities, land settlement in the neighbourhood, potential utility, and any other benefits that are not due to operations on the land itself by its past or its present occupiers”. That is all elements should be considered excepting any structural development or improvements (excavation or filling) on or to the subject land.
7. How is “unimproved value” determine?
The market determines the basis of values. Hence registered land valuers, and valuers at the Valuation Unit for this exercise, determine unimproved values from sales. As a process land valuers are required to analyze recent market sales and after making adjustments for relevant variables such as date of sale, size, topography, structures and improvements on or to land, aspect, locality detrimental factors, etc, using their experiences and skills, should arrive at the unimproved value of a land. In view of the above definition the“unimproved value” of an unimproved land may be the same as its “market value”. A valuer should consider case by case.
8. How do valuers determine 5% Lessor’s benefit on sales of improved land?
This is straight forward. Valuers look at vacant land sales in the area to determine the value of the land portion and apply it. The residue in the improved sale should represent the value of structures and/or improvements to or on the land. Where there are no vacant land sales in the locality a valuer could look at relevant and recent vacant land sales in other localities, making adjustments for variables mentioned above to arrive at the unimproved value of a subject land.
9. How could the Director of Lands find out if a lease is transferred significantly less than its unimproved value?
Clause 3(g) of Schedule in Section 112 of the Land Leases Act
empowers the Director to require a valuation report from the Valuer- General determining the unimproved value. If the valuation is in excess of the price or declared value the cost of the valuation shall be borne by the registered proprietor. Accordingly the Director shall apply the 5 % benefit on the unimproved value as assessed by the Valuer-General.
10. Is it against the law to under-declare lease transfer prices or values?
Yes. It is against Section 47 of the Stamp Duty Act [Cap 47] to wilfully evade duty. Every person who wilfully and fraudulently evades or conspires to evade, or assists another person to evade, payment of duty to which any instrument is liable under the Stamp Duty Act shall commit an offence punishable upon conviction by a fine not exceeding VT 300,000 or imprisonment for a term not exceeding 2 years, or by both such fine and imprisonment.
11. Are there any classes of persons exempt from paying 5% Lessor’s benefit on transfers?
Yes. Section 48C of the Land Leases Act exempts a registered proprietor who transfers his or her lease to a member of his or her nuclear or extended family.
12. Could a registered proprietor ask an independent registered land valuer to assess the unimproved value of a lease?
Yes. However the Minister of Lands prefers to have the Valuation Unit assess unimproved values on his or her behalf. Where two different valuation reports arrived at two significantly different unimproved values, and the parties could not reach consciences, the matter should be referred to the Valuer-General for determination on which of the two reports is credible.
13. Does the 5% Lessor’s benefit apply on new leases and extensions?
No. New leases or extensions literally are not transfers. In new leases and extensions the Minister collects premiums assessed in accordance with subsection 32D (2) of the Land Leases Act.
14. How could the Valuation Unit know the unimproved value of your lease if you have paid only a premium for the grant of the lease to you?
If you obtained your lease after December 2004, and the Valuation Unit did assessed the premium you paid, the premium would have represented 35% of the unimproved value of your lease. Mathematically the Valuation Unit knows that you did not pay 65% of the unimproved value. Hence 35% plus (+) 65% equals the unimproved value of your lease the date it was granted to you.
Example: Premium paid Vt350,000 (35%) Unimproved value at last sale: Vt350,000 x (100/35) = Vt1,000,000
15 What if the premium you have paid had been decided arbitrarily [by the Minister] and less than what you should have paid?
If you have paid a low premium other than the amount you should have paid then the Valuation Unit would take it that the premium you paid represented 35 % of the unimproved value of the land at the date the lease was granted to you when assessing the lessor’s benefit. The unimproved value of the past sale would be assessed as in paragraph 14.
16. What if you did not paid any premium at the grant of the lease and you are transferring the lease for the first time?
Unleased state land or customary land held without a lease is said to have no value unless they become available in the public domain and could be traded in the market. This was the presumption for leases granted without premiums by the Minister in the past. Accordingly the unimproved value of the land at date of lease was zero. Effectively the difference in the unimproved value between the last sale and the current sale is the current unimproved value. Accordingly the 5% lessor’s benefit will be assessed based on the unimproved value at current sale.
For further enquiries contact the Principal Valuation Officer,
Department of Lands,
PMB 9090, Port Vila,Vanuatu