THE Constitutional and Law Reform Commission will be reviewing the laws on personal income tax, according to secretary Dr Mange Matui.
Dr Matui said the terms of reference of the review would focus on the personal income tax paid by public servants and private sector employees.
“This review is necessary because income tax seems to be very high in PNG,” he said.
Dr Matui said this was according to submissions made to the tax review committee in 2014. He said one of the concerns raised in a 2018 internal discussion paper which triggered the review, was that public servants were not benefitting from tax incentives and privileges.
Consequently, most public servants working in towns and cities are forced to live in settlements and villages, exposing themselves to health and security risks.
Dr Matui said people and stakeholders would be consulted on:
- THE relationship between the living cost to the taxable income and whether tax rate should be reconsidered;
- PUBLIC service tax incentives;
- WHETHER the Government should reduce the income tax of public servants;
- HOW the informal sector can contribute to tax;
- WHETHER superannuation and retirement benefits should be tax-free and; and,
- OTHER tax related issues.
He said the commission was mindful of the Government’s concerns and reliance on taxes to fund the national budget.
Dr Matui said consultations would be conducted in Eastern Highlands, Madang, Chimbu, Morobe, Manus, Northern and the National Capital District next month.