Low revenue collection for 2016

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The Public Accounts committee has began its hearing into the proposed draft 2017 budget.  

Appearing before the PAC, the Finance Ministry revealed revenue collection for this year has not been as expected.  

Chairman of PAC, Rick Hou said as opposed to revenue collection, more has been spent on expenditure and asked whether government is spending more than what it is currently receiving.  Also on that note, Member of Parliament for Aoke/Langalanga, Matthew Wale is skeptical about the proposed 2017 budget and questioned the credibility of that budget.  Mr. Wale highlighted how the projection for 2017 will be 19% higher than the 2016 budget, when there is a deficit in this year’s midterm review of the 2016 budget.  It had been reported that there was a deficit of about $200 million in the midterm review.

Responding to the PAC’s query, Permanent Secretary Harry Kuma says, collection from the IRD has been slow.  However Mr. Kuma says, IRD itself has its own seasonal performance of revenue, especially during times when taxes are due.  Mr. Kuma says revenue performance within the IRD is still uncertain at this stage.  However he says Customs division has done well in its collection, attributing this to the volume of log exports despite its low price. 

Permanent Secretary Kuma says on pro rata basis, other charges and payroll expenses had almost reached its ceiling.  Mr. Kuma says they are working hard on curbing other charges with regards to expenditure for the rest of this year.  He says on the development budget, the country has underspent in that area and it is estimated that 70% to 80% of that budget will be used.  Also Mr. Kuma says, at this stage, the Ministry wouldn’t be able to confirm its revenue collection as yet.  He says as has been in the past, usually collection would be on the rise once the year draws to a close.  He says as has always been with Finance, raising projection of a budget is a norm.  However he says this is a challenge which they will continue to work hard at.

All line Ministries are expected to appear before the PAC before parliament resumes sitting on the 5th of December 2016.

ENDS///  

Audio - PS response to Wale's question. mp3

Audio - PS on low revenue collection. mp3


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