Govt Vows To Make Regular Salary Payments

The Ministry of Finance has vowed that it will strive to make regular salary payments to state employees, starting from January next year.

The government intends to make the payment of employees a key priority in order to improve the livelihoods of officials and encourage them to make a greater contribution to national development.

Currently officials in some rural areas are yet to receive their salaries for September due to government budgetary tensions.

Ministry of Finance Office Head, Mr Bounzoum Sisavath told Vientiane Times on Friday that a recent revenue shortfall would continue to hinder the government in its efforts to make regular payments to officials throughout the rest of this year.

“As budget expenditure for 2012-13 projects cannot be cut, we are continuing to fund projects in the previous fiscal year,” he said.

The government released a report recently saying that the relevant sectors made inaccurate projections when the decision was made to increase the salary and allowances for officials last fiscal year.

The projection asserted that the country had the financial capacity to respond to the needs of the rising budget expenditure, but the revenue shortfall has hindered the government’s efforts to fund all development projects, including salary payments.

Last fiscal year, the government increased the salary for officials from 3,500 kip per index point to 4,800 kip per index point, based on qualifications, experience and rank.

They also granted an allowance of 760,000 kip per person per month to employees to cover the costs of electricity, water, and clothing, sharply increasing budget expenditure.

The government accepted that the revenue from land use and concessions fell far short of the target. Global economic uncertainty also affected the country’s revenue as the prices of gold and copper fell.

In the 2012-13 fiscal year, Laos planned to earn 1,800 billion kip from gold and copper projects but sales only brought in 1,100 billion kip.

The budgetary tension has forced the government to halt the monthly allowance of 760,000 kip granted to State employees for 2013-14, starting from October this year.

The government also tightened budget expenditure on various projects, particularly administrative expenses, aiming to prevent Laos from falling into a major financial crisis.

However, the government maintained its commitment to increase the monthly salary for officials from 4,800 kip to 6,700 kip per index level this fiscal year, an almost 40 percent increase compared to the current level. To close the widening spending gap, the government has imposed new measures to seek more funding to respond to the needs of the country’s budget expenditure.

New measures included issuing bonds to the private sector in Laos and overseas and tightening timber exports. Senior officials believe the government can earn more money from the better management of timber and from import tax on vehicles.

In the 2013-14 fiscal year, the government has set revenue targets of at least 25,047 billion kip, representing 27.63 percent of GDP. Budget expenditure has been limited to 29,580 billion kip or 32.63 percent of GDP.

Source: Vientiane Times