30% tax info incorrect

 By SHIRLEY MAULUDU

The information that 30% tax is deducted from members’ savings who contribute to Nambawan Super Ltd is incorrect, an official said.

Chief operating officer Charlie Gilichibi said that at a superannuation contributions enhancement conference for employers hosted in Port Moresby yesterday.

Department of Trade Commerce and Industry’s Reuben Punin Kapili raised the concern yesterday saying that members were taxed 30% from their retirement savings.

“If someone has a savings of about K60,000, and he or she makes an exit, that person should go with that K60,000. You are taxing that poor guy with 30% of something – I’m seeing a lot of unfairness being done here,” Kapili said. 

Gilichibi however denied the statement, saying the idea that the superfund members were taxed 30% was misleading.

He said: “It has actually become a myth and we’re working to correct that perception among superannuation contributors. All employee contributions are tax-free. Only the employer contributions and accumulated interest are taxed.”

The Association of Superannuation Funds of Papua New Guinea (ASFPNG) in a statement had said the existing income tax (superannuation amendment) act does not impose or allow 35% (or 30%) of tax deduction on members’ retirement savings.

The income tax and income tax (Superannuation Amendment) Act 2002, provides a more beneficial outcome to favour long term contributors. Essentially the longer a member retains their savings in superannuation, the less tax is paid. 

Meanwhile, chief executive officer Garry Tunstall said NSL is looking at addressing unnecessary taxes in a review that is to be conducted shortly into superannuation funds by a task force.

Tunstall said: “In actual fact we have written to Bank of Papua New Guinea advising them that we believe that certain taxes should not be paid and we nominated that towards the task force as well. So that will be up to the task force to reduce taxes. In actual fact, we recommended that there should not be any tax.”

“We are trying as much as we can as a trustee to push the government to change the tax law, relating to superannuation and we’ll continue to do that – so we’re on your side.”