(picture David Kalsal planting mangroves. Credit Ekoftau Environment and Wellbeing Association
Since the devastating earthquake of December 17, 2025, Vanuatu has once again shown the World its extraordinary resilience. Again, the people of this paradise rise from adversity with hope, strength, and a willingness to contribute to their country’s recovery and future. This moment presents an opportunity not just to rebuild, but to reimagine Vanuatu’s economic foundations.
In political debates, mainstream media, and social platforms, there has been a lively and at times overwhelming surge of ideas about how to shape the nation’s future. Suggestions range from building a greener and more pedestrian-friendly capital to expanding road networks and infrastructure. Some call for increasing tourism through more flights and cruise ship visits, while others advocate for diversifying fossil fuel providers, exploring geothermal energy, investing in the digital economy, and even relocating the capital city.
On paper, these proposals paint an ambitious vision. But they all beg the same critical question: How will we pay for it?
Rethinking Revenue
In Vanuatu is very common to hear claims that companies pay Value Add Tax (VAT), but ultimately it is important to understand that VAT is actually paid by the final consumer as the VAT is included in the price of the goods and services. Companies make their effort to create Value and make profit. Profit is not taxed in Vanuatu.
The Ministry of Finance has been alerting for the need to generate more revenue to sustain basic services. Recently, the Minister revisited the long-debated idea of introducing an income tax. The intent was clear — to find sustainable revenue streams beyond foreign aid and citizenship sales. But an international expert came to Vanuatu and observed that “Vanuatu is a zero-tax jurisdiction, and imposing income or corporate tax in an economy that’s largely based on subsistence agriculture would create more problems than solutions”. Although the Finance Minister Proposes Income Tax for Public Servants, Including the PM and Ministers and not subsistence farmers. It seems that, it risks undermining another revenue government initiative that is fundamentally attractive because of the the zero-income tax: the Citizenship by Investment program, which markets Vanuatu’s passport alongside its Tax Heaven and crypto Paradise status. What began as a policy intended to generate revenue has , over time, become so entrenched and counterproductive that it now undermines its own purpose. De facto, the policy that created more problems than it those that was supposed to solve, while confusing the perception of the Country: the Natural Paradise become a Blacklisted Crypto Paradise.
Although introducing a fair and progressive income tax could assist building a self-reliant state, reducing dependency on aid, and funding critical services like health, education, and environmental protection, the underlying tension here is not about whether to tax or not, but about the kind of economy we want to build. Instead of chasing short-term revenue fixes, we must explore ways to strengthen institutions, uphold the rule of law, and create systems that both support development and preserve the values we hold dear in Paradise.
Life could be so much is easy if we all focus on preserving our Clean Water, Clean Air and Clean Land and Oceans. An effective investment in the Nation would be focused on our Youth. Education and scientific knowledge focused of the preservation of the Paradise can create substantial and meaningful employment opportunities it can contribute to ensure food security, such adding value to the unique organic produce promoting long lasting returns for the People of Vanuatu, certainly more than the volatile and complex investments in digital currency with all the troubles that attracts. Monetizing Nature and treat it as a natural resource or commodity till the extinction is not smart.
Yes, but Government needs money: how to generate revenue? There are existing laws, by laws, regulations – across central, provincial and municipality levels – in the areas of public health, environment, safety regulations like the building code, that can, while ensuring wellbeing generate revenue from permits, other fees and penalties The lack of enforcement had with tragic consequences after the earthquake costing the life of some and significant building loss. Lack of compliance of public health and environmental laws also kills people and nature and represents loss of government revenue.
The Role of the Environment in Economic Growth
Central to this conversation is Vanuatu’s natural environment — our most valuable asset. Pristine beaches, untouched rivers and lagoons, coral reefs, and lush forests are not only cultural treasures but also the backbone of our tourism industry, as recognized by a resident economist.
Yet, if unmanaged, tourism can become a threat to the very environment it relies upon. Planes and cruise ships bring in much-needed income, but also contribute to carbon emissions and environmental strain. Therefore, sustainability must be the cornerstone of our tourism strategy.
High-end resorts and tourism operators must comply with national environmental and public health regulations. Compliance should not be optional or selective — it must be enforced fairly across the public and private sectors. No one, no matter how wealthy or powerful, is above the law.
Strengthening Governance
Currently, Vanuatu ranks 84th with a score of 0.14 on the World Governance Indicators’ Rule of Law Index, which measures public confidence in the legal system, enforcement of contracts, property rights, and protection against crime. By contrast, Finland leads the ranking with a score of 1.97. This gap is not just a statistical concern; it reflects real-world challenges in enforcing laws and managing public institutions effectively while protecting the Natural assets of the states.
Improving this situation is not just a legal issue — it’s an economic one. Enforcement of regulations by central and provincial governments and municipalities ensures that businesses pay the fees, permits, and penalties that form a critical part of government revenue. Strengthening these institutions builds investor confidence and ensures a level playing field for all.
A Path Forward
If Vanuatu is to recover and thrive economically, we must combine bold ideas with responsible governance. This means:
Ensuring that environmental protection is central to all development plans.
Requiring all tourism operators and public-sector entities to comply with basic environmental and health regulations.
Supporting public institutions in their enforcement roles to guarantee consistent revenue collection.
Moving beyond quick fixes like selling passports and instead building long-term strategies based on transparency, sustainability, and rule of law.
As we emerge from the trauma of the earthquake, let us not just rebuild — let us rethink. Let us create an economy that values its environment, empowers its people, and ensures that prosperity is both inclusive and sustainable.
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