Boost revenue by growing economy, sector: Barker

THE country can boost its revenue by growing its economy and the formal sector, an economist says.
Institute of National Affairs (INA) executive director Paul Barker said it was important to kick start the economy by generating more jobs.
“The best way to boost revenue is to grow the economy and the formal sector, which pays both income tax and sales tax, but also the informal sector workforce which pays some goods and services tax,” he told The National.
“In PNG, it’s important to kick start the economy not only to generate extra jobs but also build up revenue to make the country more self-supporting and less dependent upon constant outside life support, especially as PNG is not an intrinsically poor country, as are various countries in other parts of the world.”
Barker said PNG collected some of its revenue from resource rentals, but its largest source of revenue comes from income tax on salaries and wages and then taxes on the trade in goods and services followed by company tax.
“Our formal sector workforce is small, and only a portion of participants pay significant tax,” he said.
“Formal sector employment requires investors to see business opportunities and to invest and their funds, or to borrow, to develop businesses, both large and small.
“It also, for a start, requires restoring the businesses that have closed or been restrained over recent times, including the Porgera mine, with some 3,600 employees, plus contractors, but also tourism and hospitality operations.”
Barker said the country also needed to start taking advantage of the high prices for various commodities, ensure crops were harvested fully this year, but also that farmers invested, upgraded and diversified, which also required that basic access routes were by road, air and sea were restored.