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PM admits domestic revenues expected to decline significantly

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burnt no guti chinatown
Burning and looting in November is one of the two recent catastrophes that affects the economy.

Prime Minister Manasseh Sogavare has admitted that domestic revenues are expected to decline significantly against levels anticipated in the original 2022 Budget Strategy and Operational Rules.

Sogavare’s admittance came during his nationwide address yesterday.

He said: “I am sad to say but domestic revenues are expected to decline significantly against levels anticipated in the original 2022 Budget Strategy and Operational Rules.”

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As such he said the Government is also working on a Fiscal and Macroeconomic Response Plan to manage and mitigate the impacts of these two recent catastrophes.

The two catastrophes include the November Riots and Lootings as well as the current community outbreak of COVID-19.

Sogavare said given the tight fiscal space, several expenditure areas have been identified by the Government as a critical priority. He explained that these priorities would ensure the government can deliver essential services to all Solomon Islanders.

These priorities are: –

  1. Provincial health care grants to the match the rising pressure on health care provisions in the provinces;
  2. Quarterly service grants to provincial government;
  3. Utility payments- these fixed costs must be honored;
  4. Communication contract payment to ensure SIG communication channels remain open;
  5. Police general and COVID-19 operations to ensure both day to day security operations and to contain the COVID-19 community transmission.

Also, Sogavare said to mitigate the impact of COVID-19 on Government finances, proposed short to medium-term measures.

In the short-term, he said the following expenditure and revenue measures are proposed:

  1. Ensure that essential government machineries are operational even during a lockdown;
    1. Rationalizing government resources to focus on the economic productive and resources sectors and create funding space for new initiatives the government may want to implement in 2022
    1. Reviewing public service COVID-19 allowances;
    1. Introducing new revenue measures, which will impose export duty on minerals. The Government will also strengthen compliance and introduce new operations within Customs/Excise and in the Inland Revenue Division.
    1. Mobilize domestic and external financing
    1. The Government will also review the Treasury Bill with the intention to increase the issuance limit. The Annual Borrowing limit will also be reviewed to align with the planned commitments in the 2022 Development budget.   

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