MPGIS embarks on developing a Revenue Sharing Bill to allow distribution of revenues to provinces

The Ministry of Provincial Government and Institutional Strengthening (MPGIS) is working on developing a Revenue Sharing Bill.

This is to live up to the call made by Premiers during the Premiers’ Conference in Auki, Malaita province in 2017 to develop a policy on revenue sharing.

MPGIS Minister Rollen Seleso informed parliament about the proposed bill in his contribution to the debate on the motion to consider the Truth and Reconciliation Commission Final Report with Recommendations.

“My ministry is embarking on the introduction of the Revenue Sharing Bill. You will note that in 2017 during the Premiers’ Conference in Auki, Malaita province, all provincial governments called for a policy on revenue sharing arrangements,” Hon Seleso said.

The proposed bill seeks to authorize the equal distribution and sharing of national domestic revenues to the provinces. Sharing of revenues in this instance will be based on a number of criterias.

These include the level of population of a province, the level of poverty index, the cost of investment or infrastructure development, geography of provinces and their financial performances.

Further work on the bill will also include a detailed study and peer review of its aspects which includes review of the current tax regime, the capacity of provinces to deliver services at their level and the revenue potential of the government after the covid-19 pandemic.

As the leading ministry MPGIS will help address any challenges faced by provinces before the bill came into force. 

Minister Seleso believed that through this revenue sharing mechanism, provinces will receive almost three times more than what they are currently receiving.

He said the distribution of revenues to the provinces will have strong impacts on the development and welfare needs of provincial governments. This includes allowing provincial governments to make their own financial decisions and have certain responsibility over their functions.

All of these undertakings are part of the recommendations stated under the Truth and Reconciliation Report on institutional reform and in line with the review of the Provincial Government Act 1997.

By Fredrick Kusu