Stick to budget and do away with exemptions

The big three- (L) Secretaries for Finance Dr Ken Ngangan, National Planning Hakua Harry, and Treasury Dairi Vele

By MATTHEW VARI

Sunday, November 6, 2016 (Sunday Chronicle, PNG)

TREASURY in presenting the national budget has called on government to maintain discipline and also do away with tax exemptions.

Secretary for Treasury reiterated that with the government’s lighter envelope for next year- it is a must that budgets are strictly adhered to.

“The most important issue with expenditure is that we must stick to the budget- we do ourselves no favours when we increase the expenditures on non-budgeted items,” Vele said.

“We must maintain discipline. We are adopting a sustainable debt management strategy to fund our budget.”

“The government will finance the deficit (K1.876 billion) through a combination of domestic debt issuance with government securities and external financing.”

“With our current program we have a high interest cost, so we will review our portfolio to avoid the vicious cycle of this week’s pay going towards servicing last week’s dinau (debts) with no room for necessities.”

He also called for the government to move away from tax exemptions, which he said did not do any favours for the government in raising much needed revenue.

“We as a government will have to move away from providing tax exemptions to special arrangements.”

“See the investment hypothesis is quiet simple, business invest and earn an appropriate rate of return. Then they pay tax, we then collect those tax, we reinvest those taxes in our people and in our country.”

He said as part of the tax review, exemptions was one of the recommendations that treasury is taking onboard.

“There are about 99 recommendations from the Tax Review Committee in 2015, with the implementation of these 9 it will take the total to 15 that we have analyzed and adopted (from the 99), again over the coming year we will look at more and implement them as they make sense to us,” he added.