Tax exempt queried

By LUKE KAMA
AN economist has termed it “odd” that allowances paid to Members of Parliament are exempted tax, while public servants and others have to pay.
Executive director of the Institute of National Affairs Paul Barker told The National yesterday that public servants and employees in the private sector had their allowances taxed by the State.
Barker, pictured, was responding to the revelation by Madang MP Bryan Kramer that an MP who does not hold any other office in parliament, receives around K12,756 net pay a fortnight. This is made up of K2158 in net pay and K10,598 in allowances which is non-taxable.
Acting Clerk to Parliament Kala Aufa confirmed that all MPs were paid at least K12,000 per fortnight, while ministers, governors and MPs appointed to various offices received more.
The Salaries and Remuneration Commission, which sets out the terms and conditions of leaders, appointed leaders and elected leaders, department heads, provincial administrators, constitutional office holders and judges, confirmed that the allowances received by MPs are tax-free.
Barker said if all the allowances were, as suggested, not subject to tax, “that certainly seems odd”.
“For other members of the public, most allowances are taxable,” Barker said. “It does suggest that parliamentary terms and conditions should be subject to some independent determination outside Parliament itself, which can hardly be deemed impartial.”
Barker said much of the K12,756 comprised allowances which were designed to enable the MPs to perform their duties (such as electoral allowance and electoral vehicle).
He said it should not be seen as purely a personal reward “if used properly for electoral work”.