Govt strategy targets cutting deficit to 1pc of GDP

Business

THE Government’s medium-term fiscal strategy should reduce the deficit to 1.0 per cent of the gross domestic product by 2022, according to a Asian Development Bank report.
Country economist Edward Faber said the Papua New Guinea Government had a revenue strategy “which is trying to increase revenue through reforms, including the recent establishment of an office dedicated to handling large taxpayers.
“There are around 250 large taxpayers in this country who contribute a significant portion of taxes,” he said.
“So if we are able to focus on those large tax companies, then that would help us to raise revenues and also improve collections and grants.”
Faber mentioned this yesterday during the release in Port Moresby of the 2019 Asian Development Bank outlook report on Papua New Guinea.
“The expenditure strategy seeks to reduce expenditure to 16 per cent of Gross Domestic Product by 2020, controlling personal monuments, also bringing in financial management systems rolled out throughout the country to control how expenses are done.
“Revenue including grants is forecast at 16.1 per cent of GDP in the 2019 budget and is seen to increase by 6.5 per cent largely through ongoing reform.”
He said external debt increased to 37 per cent of the total public debt, or to 12.1 per cent of the Gross Domestic Product.
It is projected to rise to 13.5 per cent of GDP by 2020.

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