2008 revenue to hit K6bil only: Forecast

TOTAL revenue is projected to be K6,004 million next year, slightly less than the expected total K6,153 million this year, according to the 2008 budget documents.
The slight decline was due to a projected decline in mining and petroleum tax (MPT) although it was forecast to be very large.
The fall expected in mining and petroleum revenue would be partly offset by an increase in non-mineral revenues, in line with higher wages, strong employment growth and larger profits.
The three components of revenue were mining and petroleum tax, non-mineral revenues and non-tax revenues and finally grants.
Treasury Minister Patrick Pruaitch said the forecast for MPT were subject to unusual risks of variation in either direction because the international prices for oil and copper were so high and volatile.
He said the forecast increase in non-mineral revenues next year would be even larger but for a number of policy decisions including tax cuts as indicated in the budget.
Mr Pruaitch said non-tax revenue was projected to fall slightly next year because of lower dividend receipts from the Government’s share of Ok Tedi in line with an expected reduction in the copper price.
He said dividend receipts from the bank of PNG were expected to increase significantly next year in line with strong earnings on foreign reserves.
Dividends from other government assets including IPBC and the National Fisheries Authority (NFA) were expected to remain broadly similar although there was potential upside to this figure given the increased profitability of these assets.
Mr Pruaitch said donor grants at K1,123.7 million in 2008 Budget were projected to be higher than K879.1 million in this year’s budget. Infrastructure tax credits were also projected to be higher.
He said it brought the total estimate for 2008 total revenue and grants to K7,201.7 million compared to K7,199.6 million estimated for this year.