BY ALEX DADAMU
THE government is expected to lose huge revenues in terms of fiscal operations.
According to CBSI Financial forecast, the government expects to lose about $24 million in revenues from one of the major taxpayers alone for the remaining months of 2021.
Overall, the government is expected to lose more than $84.03 million in total revenues in November and December 2021 alone, as a result of the recent riots and business destruction. This will result in a fall in the overall Government’s expected fiscal revenues from $3,008.63 million to $2,924.6 million in 2021.
The report stated other revenue sources that will be adversely affected, including company tax, GST, and PAYE, reflecting the expected loss of more than 1000 jobs.
This will add more fiscal pressures to an already tight fiscal position of the government given the recovery of the country due to covid-19 pandemic-related measures.
In terms of employment, labor market performance is expected to decline in 2021, as a result of the recent anti-social behavior that led to recent riots and business destruction. According to CBSI Survey, a total of 1,000 employees is expected to lose their jobs in various sectors, wholesale and trade, and other services.
In terms of inflation, the recent riot is expected to increase the rate of inflation above 3.2 percent, as a result of an anticipated shortage of goods, according to CBSI Survey.
Before the recent riots and destruction of businesses, the Solomon Islands economy was forecast to grow by 2.5 percent in 2022.
However, this was now revised downward to 1.7 percent, and 2.8 percent in 2023.
A government statement assured that the Ministry of Finance and Finance will thoroughly assess and revise the full economic impacts of the recent riots and destruction of properties and businesses.
This will form part of the government’s overall efforts to revise the 2022 budget in the months ahead.
