The Court of Appeal in Solomon Islands has overturned a ruling that declared tax free salaries for MPs unconstitutional.
The Parliamentary Entitlements Committee, which has MPs sitting on it, voted last year to make MPs' salaries tax free.
After the announcement, the Prime Minister, Manasseh Sogavare acknowledged public outrage, but little has been done since then.
Earlier this year, the High Court declared the regulations granting the exemptions null and void.
But in a ruling on Friday morning, the Court of Appeal said that, while unpopular, the committee's decision was legal.
The executive officer for Transparency Solomon Islands, Ruth Liloqula, said the decision made it a sad day for the country.
"Just because the Court of Appeal ruled that everything is now constitutional does not make it right in my books," she said.
"It does not make it right for any sensible person to look at it because it is not right to award themselves such exorbitant awards."