SOLOMON ISLANDS PUBLIC EXPENDITURE REVIEW - Fiscal Reform and the Path to Debt Sustainability - October 2022

Jul 19, 2026

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Solomon Islands Public Expenditure Review outlines a forward-looking fiscal reform agenda aimed at restoring fiscal sustainability and securing a credible path for public debt. The report analyzes macro-fiscal conditions, assesses fiscal buffers and fiscal space for resilient development, and details revenue reforms including the introduction of VAT, tax administration modernization, and extractive sector revenue management. It also maps the wage bill and examines spending efficiency through health, education, and public investment management to improve allocative and productive efficiency.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages164

Reading Time6 h 53 min

Executive Summary

Solomon Islands Macro-Fiscal Context: A Look in the Rearview Mirror

Country context

Fiscal trends

The Narrow Path Towards Fiscal Sustainability

Macro-fiscal outlook

Fiscal buffers

Fiscal space for resilient development

Getting Revenue Reforms on the Road

Rationale for tax system reform

The introduction of VAT

Tax administration reforms

Tax revenue from the extractive industry

Mapping Out the Solomon Islands Wage Bill

International benchmarking

Spending trends

Pay analysis

Staffing analysis

Budget planning, control, and credibility

Policy implications

A Highway to Success? Analyzing Selected Issues in Public Investment Management

Allocative efficiency

Productive efficiency

Policy implications

References

Annexes

Pub lic Disclosure Authorized Pub lic Disclosure Authorized Pub lic Disclosure Authorized Pub lic Disclosure Authorized SOLOMON ISLANDS PUBLIC EXPENDITURE REVIEW | FISCAL REFORM AND THE PATH TO DEBT SUSTAINABILITY | OCTOBER 2022 | | --- | --- | STANDARD DISCLAIMER: This volume is a product of the staff of the International Bank for Reconstruction and Development / The World Bank. The findings, interpretations, and conclusions expressed in this paper do not necessarily reflect the views of the Executive Directors ofThe World Bank orthe governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. COPYRIGHT STATEMENT: The material in this publication is copyrighted. Copying and/or transmitting portions or all of this work without permission may be a violation of applicable law. The International Bank for Reconstruction and Development/The World Bank encourages dissemination of its work and will normally grant permission to reproduce portions of the work promptly. For permission to photocopy or reprint any part of this work, please send a request with complete information to the Copyright Clearance Center, Inc. , 222 Rosewood Drive, Danvers, MA 01923, USA, telephone 978-750-8400, fax 978-750-4470, [www.copyright.com](www.copyright.com. All)[. All](www.copyright.com. All) other queries on rights and licenses, including subsidiary rights, should be addressed to the Office of the Publisher, The World Bank, 1818 H Street NW, Washington, DC 20433, USA, fax 202-522-2422, e-mail: [pubrights@worldbank.org](pubrights@worldbank.org). ACKNOWLEDGEMENT: The team would like to acknowledge and thank all those who provided input to this analysis. The lead authors are Lodewijk Smets, Lachlan McDonald, Ildrim Valley, Rashad Hasanov, Grzegorz Poniatowski, Wilfred Lus, Wayne Irava, Michael Mike, Jimmy Kaluae, Juliana Weingaertner, Jeremie Amoroso, and Roberta Bassett. Virginia Horscroft, Shohei Nakamura, Yuto Kanematsu, Heather Ruberl, Massimo Mastruzzi, and Fabian Seiderer provided valuable analytical support and feedback. The team is grateful to the government for their cooperation in providing data and feedback and to key development partners in Solomon Islands for their support. Specific thanks goes out to Coswal Nelson (MoFT) who acted as the PER focal point. The team would also like to thank Hassan Zaman, Lars Moller, Steve Ndegwa, Paul Vallely, David Gould, and Annette Leith for providing overall guidance as well as the peer reviewers for useful feedback and suggestions. Angela Takats edited the report and Heidi Romano provided graphic design services. Cover photo: Selling food on the water © Neil Nuia/World Bank 2 LIST OF FIGURES 5 LIST OF TABLES 8 LIST OF BOXES 9 LIST OF ABBREVIATIONS 10 1 EXECUTIVE SUMMARY 12 2 SOLOMON ISLANDS MACRO-FISCAL CONTEXT: A LOOK INTHE REARVIEW MIRROR 18 2.1 Country context 19 2.2 Fiscal trends 25 3 THE NARROW PATH TOWARDS FISCAL SUSTAINABILITY 32 3.1 Macro-fiscal outlook 33 3.2 Fiscal buffers 38 3.3 Fiscal space for resilient development 44 4 GETTING REVENUE REFORMS ON THE ROAD 46 4.1 Introduction 47 4.2 Rationale for tax system reform 48 4.3 The introduction of VAT 50 4.4 Tax administration reforms 58 4.5 Tax revenue from the extractive industry 62 5 MAPPING OUT THE SOLOMON ISLANDS WAGE BILL 68 5.1 Introduction 69 5.2 International benchmarking 71 5.3 Spending trends 73 5.4 Pay analysis 74 5.5 Staffing analysis 77 5.6 Budget planning, control, and credibility 79 5.7 Policy implications 80 6.1 The health sector 83 6.2 The education sector 95 7 A HIGHWAY TO SUCCESS? ANALYZING SELECTED ISSUES IN PUBLIC INVESTMENT MANAGEMENT 102 7.1 Introductio

FAQs

What is the main purpose of the Solomon Islands Public Expenditure Review presented in the report?

To support a fiscal reform path that restores fiscal sustainability and strengthens the trajectory of public debt in Solomon Islands.

Which revenue reforms are emphasized to improve sustainability?

The report focuses on tax system reform, including the introduction of VAT, tax administration reforms, and managing tax revenue from the extractive industry.

How does the report assess public spending, including the wage bill and key sectors?

It maps the wage bill through spending, pay, and staffing analysis, then evaluates public spending efficiency in areas such as health and education.

Jul 19, 2026

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