$8 million surplus despite drought and low tourism numbers in 2016
By: L.N. Reklai
(Koror, Palau) The Republic of Palau Government ended the fiscal year with $8.6 million surplus, according to Minister of Finance Elbuchel Sadang, at a press conference on December 21, 2016. [restrict]
According to Sadang, government budgeted $92,852,325 for FY 2016. Actual revenue collection reached $92,791,905. Total expenditures reached at $84,186,089, resulting in the $8.6 million surplus reported.
Despite the drought and the drop in visitor arrivals, hotel room tax went up by 5%. Wages & Salary tax went up as well, due to increase in minimum wage. Also exceeded projected revenue are the Alcohol & Tobacco tax, General Import tax, and Fish Export tax. Gross revenue tax dropped by 5% but all other taxes exceeded their budgeted amounts.
“We were able to collect more than we projected, cover all our expenses and had enough leftover, “stated Sadang of the FY 2016 performance.
Furthermore he added, government subsidized PPUC for its loses during the drought and subsidized residential water billings for the drought period and despite almost 18% drop in visitor arrivals but still collected more than projected and had enough leftover. “This was concerted efforts by all branches of government which resulted in the $8 million surplus,” stated Minister Sadang.
According to Sadang, they will develop the 2017 annual budget based on similar assumptions they used for 2016 budget.
“I believe that the implementation of the President’s policy to move toward more high-end visitors is showing here. We cut the number of charter flights but we still collected revenue we expected to collect and in fact exceeded those projections,” Sadang added.
President Remengesau Jr. reiterated the same stating that “while the number of visitors went down, the average spending went up and this is in line with our policy of quality versus quantity, which meets our policy of quality tourism”.
“Belau is precious to us Palauans and we don’t want to be crowded out of our country. We have to have planned and manageable growth that provide better opportunities for everyone, a win-win situation. Our motto for the next four years is to implement the high-end-tourism , to achieve the Pristine Paradise Palau,” stated President Remengesau Jr. [/restrict]