By SHIRLEY MAULUDU
MILLIONS of users of banking and telecommunication services in the country should expect to pay more for the services after a new government levy is announced in the 2022 national budget.
According to a leaked document, the source of which the Treasury Department is investigating, the Government is expected to announce in the 2022 National Budget:
- A BANKING levy as part of the Income Tax Act to collect K190 millon per annum; and,
- A TELECOMMUNICATION tax as part of the Income Tax Act to collect K95 million per annum.
Called the dominant industry levy, it yesterday drew the anger of the dominant players in the two sectors – the Bank South Pacific Financial Group Ltd (BSP) and the Digicel (PNG) Ltd. A business community source yesterday said government revenue from the proposed levy would most probably be used for election-related purposes.
“The fact is this – the Government does not have the money to do the things that it needs to do for next year, which is principally the election-related campaigns and politically-related expenditure,” the source said.
“The complexity we face right now is that a lot of that nation building development-related medium-term development plan three and all those policy-related projects, are going to be compromised because of the way the budget is designed for campaign and election-related priorities.
“They (Government) have to raise money in different ways, (such as) via these levies. They cannot find these money via development partners because the partners have a very targeted and stringent direction on financing.
“There is a strong likelihood that around 300 (Digicel) towers operated in the market, that are not simply generating any money whatsoever, but primarily for community service functions, will have to be shut down.
“This is because the money will be diverted to paying this tax. You are looking at mostly remote, rural towers that will not operate because of this cost. Some costs will be passed onto the consumers too.
“On the banking aspect, with BSP having more than 60 per cent of the market share, the bank will be affected too.
“Similar to the situation with Digicel, BSP has non-profit-making branches across the country.
“BSP will have to go through similar exercise as Digicel and determine whether they should shut these branches down.”