Revenue hopes placed on taxes

By GYNNIE KERO
THE government is anticipating total revenue and grants in 2013 to amount to K10.5 billion, representing an increase of about 3% compared to the 2012 revised estimate of K10.2 billion.
Revenue estimates for 2013 is higher due to higher taxes on income and profits, taxes on domestic goods and services and higher taxes on international trade.
Project support grants for 2013 are expected to be K1.2 billion, lower than the estimated level for 2012 reflecting movements in the exchange rates.
Over the medium term, the expectation is that revenues in 2014 will only grow slowly to K11.3 billion.
From 2015, revenue increase due to the commencement of the PNG LNG project is expected to be K1.663 billion.
This is only slightly more than the mineral revenues the country expects to receive in 2014 of K1.622 billion.
The extra revenue will largely replace declining revenues from oil fields and the changed revenues from the Ok Tedi mine.
There is a chance that the revenues may be higher following the announcements of improved levels of production from the PNG LNG and a possibility of a third train which would lift revenues further.
Such developments are good news for supporting the Sovereign Wealth Fund (SWF). However, the country cannot bank on such positive developments as yet.