Don’t tax super benefits: Tarutia

WORKERS’ superannuation benefits should be tax-exempted, says Association of Superannuation Funds of PNG president Ian Tarutia.
“As an industry, we are against taxation on superannuation or retirement benefits,” he told The National.
A recent review of the country’s income tax laws suggests that personal income tax on salary and wages be reduced, and that tax on superannuation benefits be removed altogether.
The review conducted by the Constitutional Law and Reform Commission (CLRC) received overwhelming public support.
Tarutia said the association supported the findings and recommendations.
He had earlier raised concern over the number taxation points in the superannuation industry which greatly affected members’ savings.
Tarutia said the association wanted only one taxation point.
“As superfunds, you pay tax as a corporate entity, that’s 25 per cent,” he said.
“Because of the tax deductibility of employer contributions, that is subject to tax.
“The interest that’s earned from investment income is also subject to tax. So there are a number of taxation points within the superannuation industry that impact members.
“We recognise, however, the balance of enjoying a tax-free status and the Government raising revenue to provide services (such as) education, health and infrastructure for our people.”
The association wants the Government to remove tax on superannuation entitlements, reduce personal income tax, to create more disposable income for the people.
It, however, suggests increasing Goods and Services Tax (GST) as a fairer and more equitable way of raising revenue “as everyone contributes when they purchase goods and services”.
“The findings of the CLRC on personal income tax is timely and supports our position on behalf of over 850,000 Papua New Guineans who are superannuation contributors,” Tarutia said.