18 Nov 2010

Vanuatu revenue shortfall attributed to Customs problems

1:34 pm on 18 November 2010

Vanuatu's Finance Minister says structural problems within the Customs department have contributed to a government revenue shortfall of almost 22 million US dollars.

If approved by parliament next week, Vanuatu's total budget for next year will be almost 165 million dollars.

Sela Molisa says the more than four million dollar drop from last year's allocation wasn't expected in a year of economic growth of almost four per cent.

But Mr Molisa says changes made last year to taxes on beer, wines, spirits and tobacco in line with the Kyoto Protocol resulted in less money coming through the main revenue streams of value-added tax, import duties and excise tax.

"Also I think we have a structural problem at customs. As a result I have asked from Australia to come and audit our customs here. I think we have a structural problem and there's a lot of leakage in the system, in customs."

Sela Molisa says legislation passed last week has lowered duties and excise taxes to what they were before last year's changes and as a result, he expects next year's government revenues to bounce back.