By ISAAC NICHOLAS
THE majority of workers in the country will find more money to spend in their pay packets after the Government announced tax relief in the 2008 Budget.
Treasury and Finance Minister Patrick Pruaitch yesterday unveiled a record K8.9 billion money plan for 2008, which included tax relief for both workers and businesses.
Handing down the 2008 Budget, “Empowering the people of Papua New Guinea”, in Parliament yesterday afternoon, Mr Pruaitch said personal income tax threshold had been increased from K6,600 to K7,000.
He also announced a reduction in marginal rate of income tax from 25%-22% for people earning between K7,000 and K18,000 a year.
This means, for example, a worker earning K18,000 per annum or above would receive a tax cut of K430 per year.
Business will also get relief with the Government’s continued effort to address impediments to doing business by abolishing stamp duties on borrowings, bills of lading, incorporation of companies, and, insurance policies.
In addition, the Government will abolish the debits tax currently collected by banks as a small charge on every debt they processed.
This will benefit business and workers who operate bank cards to draw cash or do transactions.
Civil servants, as a result of the new wages agreement negotiated with Public Employees Association, will receive a general wage increase amounting to more than K1,000 a year together with other non-monetary benefits.
The 2008 Budget provides for total expenditure and net lending of K6.99 billion or 35.5% of GDP.
This includes total recurrent expenditure of K3.636 billion or 18.4% of GDP and a total development expenditure of K1.88 billion.
Personnel emoluments again takes out the bulk of the recurrent expenditure with K1.5 billion due to increase in school teacher numbers, industrial awards for health officers, superannuation contributions and increase in staffing.
According to the total Government expenditure, total payments including total expenditure and net lending of K6.99 billion, amortization K1.99 billion and loan repayment of K4 billion brings the total expenditure to K8.99 billion.