After seven years of partnership, the Government of the Marshall Islands is working with Blyce to introduce a value added tax, the centerpiece of the most significant tax reform in the nation’s history. It is a step that strengthens public revenue, funds essential services, and secures the fiscal future of a country facing some of the hardest development and climate challenges in the Pacific.
A reform decades in the making
The Marshall Islands has run essentially the same tax system for over thirty years: import duties, a gross revenue tax on business turnover, and a wage tax largely unchanged since its introduction. The system is simple, but it taxes businesses on revenue rather than value, cascades through supply chains, and leaves national revenue heavily dependent on external grants.
That is now changing. The government has committed to a two phase reform. The first phase, modernizing income taxation, was legislated in 2024. The second phase replaces the gross revenue tax and import duties with a broad based VAT and a business profits tax, a transition the IMF has called critical to reducing the country’s dependence on volatile non tax income and creating fiscal space for climate adaptation.
Introducing a VAT is one of the most demanding things a tax administration can do. Every registered business must file, invoice, and claim input credits through a system that did not exist before. Registration, filing, assessment, refunds, and audit all have to work from day one, because a VAT that starts badly is very hard to repair.
Why Blyce
The Marshall Islands did not hand this reform to a new vendor. For seven years, Blyce has worked alongside the country’s tax administration, running the systems that collect the revenues public services depend on. That partnership now extends to the VAT: configuring Blyce’s Multi Tax Solution (MTS) to administer the new tax regime, supporting the administration through registration and transition, and ensuring officers and taxpayers step into the new system with confidence.
This is what long term partnership means in practice. Reform of this scale is not a software delivery. It is years of preparation, legislation, taxpayer education, and administrative readiness, and it demands a partner who is present for all of it.
What the reform delivers
A broader, fairer tax base. VAT taxes consumption rather than business turnover, removing the cascading effect of the current gross revenue tax and ensuring visitors and the wider economy contribute to national revenue.
Self reinforcing compliance. VAT invoicing creates a documented chain across the supply chain, giving the administration reliable data to identify non compliance early instead of reconstructing it after the fact.
Fiscal resilience. Stronger domestic revenue reduces dependence on external grants and creates the fiscal space the Marshall Islands needs for climate adaptation, infrastructure, and public services.
Small states, serious systems
For a nation of around 40,000 people spread across more than a thousand islands, every administrative process carries weight. Blyce designs for exactly this reality: administrations where a small team manages the entire national tax base and where systems must simply work.
The Marshall Islands’ reform, alongside our recent partnership with Palau, reflects a broader movement across the Pacific. Small island states are modernizing their revenue systems on their own terms, with technology built for their scale.
To the Government of the Marshall Islands: thank you for seven years of trust, and for the chapter ahead.
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