Billions in taxes from oil, mining

Business, Normal

The National, Friday October 11th, 2013

 PAPUA New Guinea’s mining and petroleum industry paid an average of about K2.24 billion in government taxes each year for six years.

From 2005-10, the industry paid to the National Government K9.69 billion in corporate taxes, K1.2 billion in dividends, K1.2 billion in royalties and K1.27 billion in dividends withholding taxes.

This totalled K13.42 billion for the period.

The sector also contributed significant amount in salary and wages tax, duties and levies, the tax credit scheme and dividends to some host provincial governments and landowners.

PNG Chamber of Mines and Petroleum revealed this at the second national consultation conference in Port Moresby earlier this week.

The mining and petroleum industry contributed more than one-third of government tax revenue every year.

The chamber said: “The resource industry had experienced an unprecedented period of activity and growth and this shielded PNG from the effects of the global financial crisis that impacted many other economies.”

The last major market crash to affect PNG happened in 1997 following the Asian financial crisis and recovered in 2003.

Since then, the country had experienced an extended cycle of sustained growth until the middle of last year when evidence of a slowdown began to show.  

“Exploration had been at an all-time high, resulting in widespread benefits across the country since exploration funds were spent in provincial centres and towns and on grassroots employment across the country,” the chamber said.  

Formal employment in the mining and petroleum sectors had grown to more than 35,000.

The workforce in the formal informal mining sector expanded to 60,000-80,000.