Muthuvel calls for repealing of funding Act

WNB Governor, Sasindran Muthuvel is calling on the Government to formally approve the repealing of the amendment of Inter Government Relations functions and funding Act on Beer and Cigarette Tax Revenue come the 2018 budget.

The Act that was passed in 2009 and amended in 2012 to ban the 20t per bottle beer and 3t per cigarette has caused the provinces to lose over K2m internal revenue annually for past five years.

Muthuvel said this will empower the provincial governments to generate revenue and offload some burden of funding dependency on National Government.

“Next year's GST component has been reduced to K5m for WNB compared to K16m for this year 2017 , so our entire internal revenue for 2018 falls significantly by 80% which is equivalent to K8 million as total internal revenue projected for 2018 through GST (K5m) and K3m from internal collections mainly through Liquor Licensing , MVIL remittance , PMV Licenses and (excluding PSIP and Trust Development funds) forecasting 2018 to be challenging for the Province.”

Muthuvel is strongly supporting Prime Minister Peter O’Neill’s initiative of allowing Provincial Governments to collect their own GST and retain it.

“Repealing the 2012 amendment will have little effect on the distributors nor customers "as a matter of fact, no one either the SP distributor or retailer or people was complaining about the tax when it was in effect, it would be beneficial for the Province to put to good use in creating prevention measures for alcohol related accidents, violence and crime," he said.

Oro Governor Garry Juffa also raised this issue in Parliament on Wednesday.

Juffa called on the Government to revisit the Act and repeal the Government relations functions and funding Act and allow the provinces to get what is rightfully theirs.

In response, Treasurer Charles Abel told Parliament that the Government will look into it and advise accordingly.

Freddy Mou