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Today’s Top Headlines

Vanuatu Budgets For Tax Shortfall

by Mary Swire,, Hong Kong

23 November 2010

Vanuatu’s Finance Minister, Sela Molisa, has disclosed that a structural problem within the Department of Customs may have contributed to a fall in forecast tax revenues by around USD22m in 2010.

He said that the government had not budgeted for a fall in tax revenue during 2010, but it appeared that last year’s increases in taxes on alcoholic drinks and tobacco had resulted in an unexpected reduction to collections of value-added tax, and import and excise duties.

The government therefore believes that there may be a structural problem in the Department of Customs, and Molisa announced that he has requested assistance from the Australian government to audit the Department’s system and look for any leakages.

Molisa added that the recent approval of measures to lower alcohol and tobacco duties back to their previous levels should mean that revenues rise again next year. However, he said that a cut of almost USD4.25m out of the USD160m budget for 2011 was intended to provide a buffer against the risk of an extended fall in revenues and any other risks that Vanuatu may face in the near future.

TAGS: compliance | tax | value added tax (VAT) | tax compliance | budget | audit | Australia | Vanuatu | excise duty | offshore | import duty | revenue statistics

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