Revenue not on target: Basil

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TREASURY Minister Sam Basil, pictured, says corporate income tax and goods and services tax collections by the government have been below target.
Basil told Parliament yesterday in his statement on the state of the economy that the Government continued to be confronted with challenges of compliance and subdued domestic business conditions.
He said receipts from departmental fees and charges continued to be low and problematic.
“Dividend payments from our state-owned enterprises are very low, often paid late if at all, and appear to be discretionary and the performances of most of our public entities continue to be poor,” Basil said.
“The previous government formulated a comprehensive medium term revenue strategy but we are in danger of missing many of the targets,” he said.
Basil said Prime Minister James Marape had set a cash revenue target of K15 billion over the next two years, meaning that there would need to be a substantial lift in cash revenue over 2019-2021.
“This is higher than the current medium term fiscal strategy target, but it is possible if we refocus our efforts and re-energise our commitment.
“In terms of fiscal expenditure, non-essential spending in the form of personnel emoluments and office rental expenditures have ballooned and continue to expand to date.
“The prime minister has directed that control measures be implemented at these overruns and interest costs which have increased aided by the government now recognising public entity debt that was previously inappropriately guaranteed.
“This higher non-essential spending has reduced spending on essential government services and the level of government arrears remains far too high for our businesses to endure,” he said.
Basil said when government paid its “dinaus” (debt) the private sector could afford to also pay their own supplies and reinvest.
He said while reciept of the profits from sovereign bond came in late 2018 and assisted in financing and part of foreign exchange imbalance, the remaining foreign exchange imbalance stood.

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