Palau’s Foreign Aid Program: Streamlining the Tax Exemption Process

Efforts to Enhance Efficiency of Foreign Aid Programs in Palau

The government of Palau has streamlined its tax exemption process for humanitarian shipments, aiming to enhance the efficiency of foreign aid programs. This guide provides a comprehensive overview of the steps involved in obtaining tax exemption for goods donated to Palauan entities and agencies.

Time Frame

The normal process of applying for tax exemption can take anywhere from a few days to 1-2 weeks. However, during times of emergency, exemptions can be processed within hours, according to Ministry of State officials and the Director of Customs.

Step-by-Step Process

To obtain tax exemption for goods donated to Palauan government entities and agencies, follow these steps:

Pre-Shipment Approval

• Goods require prior approval from relevant departments before shipment.

Obtain Dispatch Documents

Required documents include:

• Original Bill of Lading/Airway Bill
• Commercial Invoice/Invoice for value of goods in consignment
• Itemised packing list
• Letter of Donation (if applicable)

Send Original Documents

Courier copies or original documentation must be sent to the in-country contact, shipping agent, national office, or organization.

Arrival of Documents

Upon arrival, obtain a Request for Tax Exemption letter from the government department or organization.

Submit to NEMO

Take all original documentation to the National Emergency Management Office (NEMO) to facilitate exemption requests to the Ministry of State.

Ministry of State Approval

The Ministry of State makes a ruling on the validity of the exemption request and writes a letter to the Bureau of Customs and Border Protection agreeing to an exemption.

Take Approval Documentation to Customs

Take all approval documentation to the Customs Office at Malakal, where the customs director will approve the exemption and release the goods.

Exemption Certificate Document Requirements

The following documents are required for tax exemption:

• D&T Exemption Certificate (1 original)
• Invoice (1 original)
• AWB/BL/Other Transport Documents (3 originals)
• Donation/Non-Commercial Certificates (1 original and 1 copy)
• Packing Lists (1 copy)
• Phytosanitary Certificate (not required for used clothing)

Transit Regime

All goods entering Palau must come through Malakal Port or the Palau International Airport. There are no bonded facilities to accommodate transit goods, but sealed containers proposed for transit purposes may be considered on a case-by-case basis during exceptional circumstances.

For more information on Palau’s foreign aid program and tax exemption process, please contact the National Emergency Management Office (NEMO) at [insert contact information].