TAX can be a burden to people and companies.
It becomes a burden when personal income tax and corporate tax are high.
There are other taxes, deductions and municipal charges that individual workers and companies are required to pay.
These include goods and services tax (GST) and other services provided by the State.
What is left from taxes and deductions is then redistributed among other expenses such as school fees, medical costs, transportation, food, electricity, water and other costs.
Taxpayers are caught in a tough situation when they pay high taxes.
Many Papua New Guineans are financially struggling today because they are paying high tax.
The Government has made the situation worse by:
- KEEPING a very high personal income tax rate, which can be as high as 50 per cent or more, depending on the annual salary level of the taxpayer;
- REDUCING corporate income tax rate for entities to 30 per cent, which is lower than personal income tax; and,
- GRANTING significant tax concessions to the extractive sector.
The Government is allowing foreign-owned companies to enjoy their earnings while ordinary Papua New Guineans are forced to pay high taxes.
Papua New Guinea taxpayers are shouldering a massive tax burden.
They are carrying the financial burden of the national budget, however, the purchasing power of their fortnightly take-home pay is being progressively taken away by the high rate of inflation in the country.
The high personal income tax and inflation rates are driving taxpayers into financial poverty.
Papua New Guinea has a biased and unfair tax system, which needs to change.
The Government needs to reduce personal income tax rate to 30 per cent or below to provide much-needed financial relief to the few tax paying individuals.
This change can start with next year’s general election. Taxpayers deserve better.