How Unfair Market Fees and Complex Tax Rules Are Hurting Women Entrepreneurs in Solomon Islands

The ADB warns that complex taxes, high market fees and limited financial access are restricting women’s economic participation in Solomon Islands, despite their significant contribution to the workforce. Simplified taxation, gender-responsive budgeting and greater investment in childcare, infrastructure and financial services could boost women-led businesses, government revenue and inclusive economic growth.

The Asian Development Bank (ADB), drawing on research from the World Bank, International Monetary Fund (IMF), Organisation for Economic Co-operation and Development (OECD), International Labour Organization (ILO), United Nations Development Programme (UNDP), and Pacific Private Sector Development Initiative (PSDI), has called for major tax and administrative reforms to improve women's economic participation in the Solomon Islands. In its November 2026 policy brief, Creating Fiscal Space for Women's Economic Participation Through Tax and Administration Reforms in Solomon Islands, the ADB warns that complicated taxation, overlapping business regulations, limited financial access and inadequate public services are preventing women from expanding businesses and securing formal employment. The report argues that removing these barriers could increase government revenue, strengthen household incomes and support sustainable economic growth.

Women Work More but Earn Less in Solomon Islands

Solomon Islands, an archipelago of nearly 1,000 islands with approximately 800,000 residents, faces major economic and geographical challenges. Around three-quarters of its population lives in rural areas, where poor infrastructure, limited transportation and weak digital connectivity restrict access to markets and financial services. Women face additional difficulties because of unpaid household responsibilities, limited land ownership, gender-based violence and fewer formal employment opportunities.

Although women's labor force participation stands at 82.4%, compared with 86.2% for men, these figures hide significant inequalities in earnings. Men outnumber women two to one in paid employment, while 49% of working women receive no monetary compensation. Approximately 85% of women rely on informal selling, and more than 70% participate in subsistence agriculture. Only 19% of employed women work in formal employment, compared with 31% of men, restricting their access to stable incomes, business credit and social protection.

Women also remain underrepresented in business leadership despite having ownership stakes in 47% of formal firms. Nearly half of corporate boards have no female representation. The World Bank's Women, Business and the Law 2026 assessment gives Solomon Islands scores of 46.5 out of 100 for legal frameworks, 31.4 for supportive frameworks and just 21.4 for enforcement perceptions, highlighting major weaknesses in economic rights and their implementation.

Complex Taxes and Market Fees Hold Back Women Entrepreneurs

The country's tax system presents another major challenge. Tax revenue reached 24% of gross domestic product in 2024, compared with 23.1% in 2023. Taxes on goods and services contributed 61.7% of total tax revenue, while income, profit and capital gains taxes accounted for 37.5%. However, outdated legislation, fragmented consumption taxes and complicated administrative procedures discourage small businesses from entering the formal economy.

Approximately 70% of workers operate in informal or subsistence activities, limiting the government's ability to collect income taxes. Personal income tax rates range from 11% to 40%, while corporate income tax stands at 30%, increasing to 35% for mining income. The ADB argues that simpler registration, licensing and tax procedures could encourage business formalization without placing excessive financial pressure on small entrepreneurs.

Local market charges particularly affect women traders. At Honiara Central Market, where approximately 90% of vendors are women, traders pay daily stall fees of SI$12, product-specific charges such as SI$50 for betel nut, and toilet fees of SI$5 per use. Because these charges are fixed rather than linked to earnings, they consume a larger share of income among low-earning traders. The report recommends adjusting fees according to business turnover and improving market facilities.

Tax Modernization Could Expand Revenue and Economic Opportunities

Solomon Islands currently operates a fragmented consumption tax system, including a 10% domestic goods tax and a 15% import goods tax. The government plans to introduce a modern value-added tax system that could simplify administration, reduce repeated taxation and improve revenue collection.

However, the ADB warns that poorly designed consumption taxes could increase costs for vulnerable households. It recommends targeted social transfers, taxpayer education and transitional assistance for micro, small and medium-sized enterprises.

Institutional reforms are also progressing. Women represented 51.3% of Inland Revenue Division employees in 2025, up from 44.7% in 2022, although none occupied executive positions in 2025. Electronic filing, digital payments and taxpayer education could reduce administrative costs, but unreliable internet connectivity, technical problems and limited digital literacy remain significant obstacles.

The report recommends mobile taxpayer services, simplified guidance in local languages and stronger partnerships with women's business associations. It also highlights that 39.5% of surveyed firms consider tax administration a major or very severe business obstacle.

Better Public Spending Is Essential for Lasting Gender Equality

The ADB emphasizes that tax reforms alone cannot overcome the structural barriers facing women. Greater investment in affordable childcare, education, skills development, transportation, social protection and climate-resilient infrastructure is essential for expanding economic opportunities.

The report also calls for gender-responsive budgeting, better economic data on women and stronger monitoring of how government revenue is spent. Existing budget systems do not systematically include gender equality objectives, making it difficult to measure whether public spending benefits women.

Ultimately, the ADB argues that improving women's economic participation and strengthening public finances must advance together. Simplifying taxation, reducing unfair business charges and directing additional government revenue toward essential services could help women expand enterprises, improve household incomes and contribute more effectively to Solomon Islands' long-term economic development.