2023 Planning Committee Visits Yap To Discuss Economic Situation In FSM COLONIA YAP, (DY&CA, Media Division Feb. 6, 2014) — As part of its mandated duties and responsibility, the Federated States of Micronesia 2023 Planning Committee held its first consultation meeting with Yap State Government on Tuesday, January 28, 2014. The meeting focused on creating long-term fiscal sustainability and evaluating feasible strategies in stimulating economic growth in the nation. FSM Vice President Alik Alik who led the national delegation to Yap opened the meeting and welcomed all the participants to this first consultation meeting of the 2023 Planning Committee in Yap. He noted the challenges facing the FSM economy with the expiry of financial assistance under the amended Compact of free Association with the United States in 2023. Yap State Governor Sebastian Anefal, who is a member of the 2023 Planning Committee, also shared with government representatives, business leaders, NGO and stakeholders in Yap some of the issues that have been discussed and agreed upon during the initial meeting of the 2023 Planning Committee which followed the Chief Executive Committee Summit in Saipan last December. At the meeting in Saipan, the FSM leaders noted that for this to happen, clear and time-specific strategies and targets need to be designed and carefully executed with the greater involvement of private sector and development partners During the Consultation meeting on Tuesday, Vice President mentioned the need to sustain economic growth and emphasized the urgency for the strengthening of contributions to ensure long-term fiscal sustainability and reduce the looming budgetary shortfall. The Vice President also mentioned about the Tax Reform Proposal which failed the approval by the Legislatures of two of the FSM States namely Pohnpei and Yap. He informed the group that the National Congress has given those two States until March 2014 to decide whether or not they want to join the Tax Reform. The approval of the Proposed Tax Reform by all four FSM States will allow the creation of a Unified Revenue Authority (URA) to be governed by a Board of Directors consisting of representatives from all four States and the National Government plus the private sectors. The Board of Directors will appoint a Chief Executive Officer (four year term—subject to reappointment) who is responsible for the administration and enforcement of the revenue laws and the day-to-day operations of the URA. Currently there are five separate authorities—four State tax administrations and the National tax administration. The State and National Governments of the FSM agreed on the necessity for modernizing and strengthening the tax system through the introduction of a uniform, nation-wide set of rules for administering all taxes. The URA will collect taxes and distribute to the participating State and National Governments their respective shares of taxes collected. The introduction of this tax reform policy would repeal the national import tariffs and the state sales taxes. Also, upon its introduction there will be a change in the tax amounts withheld from the salaries and wages of employees. The first $5,000 of earnings will no longer be subject to tax. Presenters during the Consultation in Yap have emphasized the need for economic reforms, particularly revenue mobilization and public administrative reforms that need to be immediately carried out to enhance and support economic growth strategies. The economic projection by Mr. Norio Usui, Senior Public Management Economist of the Asian Development Bank, during the consultation in Yap on Tuesday indicated that FSM may not be able to continuously provide for its public services at the termination of the financial assistance under the Compact of Free Association with the United States in 2023. To minimize these problems from happening after 2023 and beyond, the FSM should start looking for ways as to how it should handle all the difficulties. Updating the group on a number of on-going undertakings, the Secretary of the Department of Resource and Development (R&D) presented a general overview on sector reforms and noted that challenges continue to be significant due to limited support and capacity constraints. The business climate in the FSM and the challenges that are faced by investors and entrepreneurs is something that the governments throughout the FSM need to carefully assess for impacts. The 2023 Planning Committee Secretariat, led by Evelyn Adolph, Director of Office of Statistics, Budget and Economic Management, Overseas Development Assistance and Compact Management (SBOC), with support from the Asian Development Bank and Pacific Islands Forum Secretariat, presented a long-term fiscal sustainability analysis and options for creating fiscal space to support the accumulation of funds for the Compact Trust Fund. The Office of SBOC also emphasized that significant efforts on fiscal front, along with political and leadership resolve are imperative to closing the expected shortfall in the Compact Trust Fund by 2023. After deliberating on the important issues, the Committee closed the meeting in Yap which took place at the Yap-Small Business Development Center Conference Room.
Posted on: Thu, 06 Feb 2014 08:31:18 +0000
Trending Topics
Recently Viewed Topics
© 2015