NRI Economist on Budget

Economic Policy Program Leader for the National Research Institute Dr Francis Odhuno has congratulated the Government on its of K14, 717.9 billion budget.

However he says it comes with a lot of expenditures compared to last years.

“ I think the 2018 budget is a good one although it comes with a burden, because the expenditure has increased last years, around 12 to 14 billion, so there’s going to be a burden of how to generate more revenue,” said Dr Odhuno.

One problem he found with it was on the personal income tax.

“I was expecting the personal income tax to be taxed less because last year the companies got some tax reductions, it was reduced to 30 percent on average.

“Right now the individual tax payers rates still remains as high as 40 to 42 percent.

“Individuals are now the biggest losers,” said Dr Odhuno.

In terms of the greater taxation regime on resource sector he says the sector is safe however it is an unfair advantage.

“Where we expect to get tax from the mining oil and gas sector, we still have those problems of low prices in the commodity market.

The issue of using local currency for business transactions was also brought up as a remedy to strengthen the value of the kina.

“ One area is to ensure the transaction between Puma Energy and Oil Search is conducted in local currency (Kina), currently Puma was obliged to pay Oil Search in a Foreign currency or probably in a foreign account, “ explained Dr Odhuno.

Meredith Kuusa