Fiscal regime hit by sharp drop in taxes

Business, Normal
Source:

The National, Tuesday September 29th, 2015

 PAPUA New Guinea’s fiscal situation this year has been severely challenged because of the sharp drop in taxes that will be paid by companies that export such products as gold and copper, Treasurer Patrick Pruaitch says.

He said if the 30 per cent company tax rate was cut, PNG would not benefit as much when higher prices allowed company profits to soar. 

“Do not think I am picking on, or singling out the resources sector. Other sectors also make very high profits. The financial sector, for example, makes significant profits after charging high interest rates on loans to many Papua New Guineans, and paying minimal rates for deposits,” he said during opening of the 12th Pacific Islands Tax Administrators’ Association (PITAA) annual meeting in Port Moresby yesterday.

He said from time to time, it was necessary to review PNG’s progress, while facing up to the need for change could be challenging and confronting.

“To look at where we have got to go and to understand how the world is changing. We can never sit still as global economic and business environments are constantly changing. Our tax system and administration needs likewise to keep evolving and reforming.”

Meanwhile, Pruaitch thanked the Pacific Financial Technical Assistance Centre (PFTAC) for the close collaboration and assistance to PITAA and acknowledged various international organizations who were in the country as observers and presenters for the meeting.

He also urged participants to be able to work together for the benefit of the region as a whole

“I am sure you will use this opportunity to learn and make plans that will strengthen the fiscal position of not only your individual countries, but the Pacific as a whole.”