The local economy in Port Vila faces significant challenges as revenue collection through the Value Added Tax (VAT) is expected to be impacted by the aftermath of the December 17, 2024, earthquake. The 7.4-magnitude disaster caused widespread damage, particularly in the heart of Port Vila, leaving over 70 shops unable to operate.

Many businesses in Port Vila’s town center are still looking for new locations to relocate, while others report minimal sales activity since the earthquake. This has raised concerns about the overall performance of businesses in the area.

Footage of damaged local shops and empty streets underscores the current challenges faced by business owners. Experts suggest that the disruption to commercial activity could have a long-term effect on government revenue, as fewer transactions in the central business district may result in a noticeable drop in VAT collections.

There is growing uncertainty about when Port Vila’s commercial hub will return to normal operations. Access to international engineers is critical to assess whether damaged buildings require repairs or complete demolition and rebuilding.

The disruption has also prompted some business owners to request financial assistance from the government to offset the losses incurred due to the disaster.

VBTC has reached out to the acting director of Customs, who is yet expected to provide updated projections on VAT collection. Initial indicators suggest that recovery efforts will take time, and the government may need to brace for a decrease in revenue in the short term.

In the meantime, businesses outside the town center are exploring strategies to overcome the economic impact of the earthquake. These efforts are seen as critical to sustaining economic activity and ensuring that recovery efforts move forward.

As Port Vila grapples with the effects of the disaster, residents and business owners alike are hoping for swift action to restore normalcy and rebuild the economic heart of the city.