Drop in employment reflects current state of economy: Yaninen

By DALE LUMA
A DROP in employment nationwide is a reflection of the current state of the economy, Micro Small Medium Enterprise (MSME) Council president Des Yaninen says.
It was revealed by Internal Revenue Commission (IRC) commissioner-general Sam Koim that employment in the private sector had declined which was reflected in the past months by reduction in the salary and wages tax (SWT).
Yaninen said various factors, including the Coronavirus (Covid-19), the closure of the Porgera gold mine, downsizing of many businesses and delay of key resource projects, would see employment continue to decline.
“Employees being laid off are given a lump sum of money,” he told The National.
“This should be used wisely by starting a small business.
“The National Fisheries Authority is a model organisation in PNG that has anticipated this decline and so are sending over 250 of their contractors to me to undergo financial literacy and SME training.
“While certain sectors of the economy struggle, there will always be a demand for things like food, basic store goods, housing and transportation so SMEs can get into these.
“And if informal sector traders are expected to be formalised and taxed, they must be incentivised to do so.
“They must see the direct benefit getting formalised.
“Right now less than 3 per cent of SMEs have ever obtained a loan and more than 80 per cent of our people still don’t have bank accounts.
“There is K12 billion circulating in the informal sector cash economy.
“SMEC working together with IRC must incentivise informal sector participants to formalise.
“Currently, Smec (Small Medium Enterprise Corporation) is advertising a small business correspondence course in the newspaper for K380.
“An example of an incentive to the informal sector would be, get registered with IRC and only SMEs with tax identification numbers (TIN) can do the training for a discount of K100 instead of K380.
“These alternatives and more must be presented to the informal sector to encourage them to formalise their businesses.”