Palau Tax Reform
Message from the Tax Reform Committee Chair and Bureau of Revenue & Taxation
Director, Elway Ikeda
In 1986, the Republic of Palau adapted and continues to practice the Gross Revenue Tax system. Despite the ongoing evolution to diversify and strengthen Palau’s commerce and trade, the national government is challenged with compliance and tax revenue collection. Thirty-five years later, in efforts to promote economic growth and sustainability, on September 29, 2021, President Surangel Whipps, Jr. signed into law RPPL 11-11 (Palau Goods and Services Tax Act) that would comprehensively reform Palau’s tax code effective January 01, 2023. The law intends to modernize Palau’s tax regime into a fair, equitable, and inclusive one that promotes the growth of business and commerce while effectively collecting revenue needed to fund essential government services.
Under the law, the Ministry of Finance was tasked to form a steering committee to oversee the implementation and transition to the new tax system laid out in RPPL 11-11. As the chairman of the Tax Reform Committee, I would like to emphasize that the readiness of all taxpayers is a crucial measure of the success of our implementation efforts and a smooth transition to our new tax system in the upcoming year. The launching of this webpage will serve as the center or source of all information and resources related to the tax reform. The committee hopes that this webpage will increase public awareness and provide meaningful support to prepare and engage our taxpayers throughout this process.