FINANCE minister Snyder Rini says the government’s current cash-flow and fiscal performances are within the requirements maintained by the ministry.
He revealed this in Parliament when asked by the Opposition leader Jeremiah Manele to inform the house about the “current actual cash-flow for the first quarter forecasted cash-flow and the actual revenue collected for the first quarter”.
Responding to the question, Mr Rini said government cash-flow is quite different from government fiscal position.
He said the government’s fiscal position for the first quarter of 2016, like any previous years, was always expected with actual revenue collection performing below quarterly prorated budget.
“This is because on pro-rata basis, we simply divide the total budget by 12 months but the actual cash that comes in will vary depending on the different due dates for paying taxes,” Mr Rini explained.
He said the shortfall in government revenue in the first quarter of this year is roughly about $41 million and this may be due to the revenue pro-rated for the first quarter, which will be collected later in the middle of the year.
“For example, the Inland Revenue collects most of the corporate taxes after June and also the major economic sectors like the fishing industry and the logging industry start late at the beginning of the year hence the forecasted revenue for the first quarter is a shortfall by $41-million.”
Nevertheless, Mr Rini assured Parliament that the revenue started picking up by the end of the first quarter and his ministry is expecting the revenue performance to continue to rise in the second, third and fourth quarter of the year.
When asked to confirm that accuracy of a Solomon Star Report of a Government deficit of $172-Million deficit from 2015, Minister Rini said the report was misleading.
He said the report only took into account the SIG budget component that was funded by current revenue and did not consider the portion that was funded by the use of reserve.
He said SIG budget is cash- based and the use of cash reserve was important to furnish actual government revenue for 2015 in order to attain a balanced budget.