NA approves adjustment of government budget expenditure plan

On 25 December, National Assembly members approved the adjustment of the government’s budget expenditure plan for the 2007-2008 fiscal year with the provision of 610.12 billion kip to the country’s high priority projects.

The 610 billion kip allocation is the surplus revenue that the government collected, exceeding its targets during the 2006-2007 fiscal year.

Finance Minister, Mr Somdy Douangdy, told the 4^th NA session that 147.26 billion kip of the total allocation would be spent on necessary development projects planned for local areas, including 62.14 billion kip for rural development and poverty reduction projects and debt settlement.

He added that 124.46 billion kip would be spent on flood compensation for those areas affected by natural disasters during the last financial year, including the renovation of irrigation systems, and the reconstruction of bridges of bridges and roads.

In addition, 184.23 billion kip would be used to replenish treasury reserves.

However, some NA members suggested spending a portion of the surplus revenue on developments in the sectors of information and culture as some provinces only have access to very old media equipment.

The members also said that funds should to go towards supporting the heroes and soldiers who sacrificed their lives for national liberation in 1975.

Total national revenue for the 2006-2007 financial year was confirmed at 6,134 billion kip. This was a 10.9 percent increase on the year’s budgetary targets, leaving a 610.12 billion kip surplus.

Of the total revenue, 2,584.07 billion kip was derived from tax collection, 1,572.78 billion kip came from import-export tax collection, and 212.27 billion kip was collected though the forestry sector’s sale of raw timber.

The reasons for the revenue increase included a number of major projects that have begun to directly benefit the country’s economy, in addition to the increasing export of Lao gold and copper to the world markets.

Mr Somdy confirmed that the management of government revenue collection is now much stricter, to reflect the marked growth shown in business and production units.

Chairman of the Economic, Planning and Finance Commission, Mr Khamsing Sayakone, said that although total revenue was above expectations, most of the revenue was derived from the country’s natural resources, such as the sale of gold and income from hydropower projects, the extent of which remain uncertain.

The only source that failed to reach targets were fees from state assets and land.

The reason given for this anomaly was the appreciation of the Lao kip. Due to fluctuations in currency exchange, the country’s international over-fight fees and other rentals of state assets last year fetching 10,500 kip per US $ 1, now equal US$ 1 to 9,600 kip.

Revenue collection (excluding the sale of wood) in provinces attained 2,962.62 billion kip, 10.17 percent more than planned in the budget. 13 provinces in total were able to exceed expectations.

Total government revenue from grant aid arrived at 673.96 billion kip, or 98.97 percent of the annual budget estimates.

Gross national expenditure for the 2006-2007 financial year reached 8,115.42 billion kip, or 99.58 percent of the target of last year’s budget. (Vientiane Times)