Solomon Islands Government hit with $269 million revenue black hole
The Government has fallen well short of its revenue targets so far this year.
Solomon Islands Government Revenue has fallen short against expected collections to the end of May, resulting in a $SBD269.8 million revenue shortfall for the first five months of the year.
Despite what the Government said was “record underspending”, revenue collection by the end of May was well below what the Government anticipated, resulting in the $269 million black hole.
The shortfall, which the Government said was “manageable”, is set to be “financed internally” by the use of Government reserve.
Government revenue collection until May was stronger than it was for the same period a year ago, yet the Government attributed to revenue hole to sluggish growth in the productive sectors, negative inflation for the past eight months.
The Government said it expected a spike in revenue for June.
The Minister of the Ministry of Finance and Treasury Hon. Snyder Rini acknowledged the Inland Revenue Division (IRD) for the increased revenue collection rates even with less favourable macroeconomic conditions and with the support of the RSIPF Fraud Squared and Janus commended the recent uncovering of tax fraud.
By end of May, development and payroll spending are tracking below budget respectively by 17 percent and 8 percent. Debt service is on track while other charges is slightly overspent by 4 percent.
The combined impact of these spending pattern resulted in a -Year-To-Date actual total spending of 1.470 billion.
The Ministry is now making a concerted effort to ensure that available funds secured for the rest of 2017 are prioritized to only those activities and projects that can be successfully completed this year.
It refocus cash disbursements for discretionary spending to strategic areas of policy implementation, trying to do ‘more with less’ and ensuring that all Ministries do not spread themselves too thinly across competing priorities.