Govt proposing to increase tax

PROPOSED increases in telecommunications and banking levies in the National Budget are expected to be implemented next year in consultation with stakeholders, a report states.
The Deloitte 2021 budget report said the Government could be imposing a new tax on the banking sector plus a new universal access levy on telecommunications.
Bank South Pacific (BSP) group chief executive officer Robin Fleming had previously clarified that any increase would not affect customers but only shareholders.
“BSP’s view is that any levy or tax cannot be passed on to customers,” Fleming said.
“It is a tax on shareholders, predominantly PNG shareholders including Kumul Consolidated Holdings Ltd, Nasfund (National Superannuation Fund), Nambawan Super and Comrade Trustee Services Ltd,” he said.
Kina Bank chief executive officer Greg Pawson had said it was counterproductive to impose an increase in banking levy on the banking sector.
The measure was to have been implemented this year but had to be deferred when the Covid-19 hit the country.
The Government said there would be public consultations prior to the introduction of the new tax.
The universal access levy on telecommunications will likely be an increase in cost on airtime passed onto customers by network operators.
This levy is to be based on turnover with a rate set in line with international practices and PNG’s needs.
Deloitte stated that as part of the reform, a mutualisation policy will be developed and adopted to ensure the sharing of infrastructure. The Government has also proposed to conduct a review of taxation arrangements around the fuel industry.
It will also explore the possibility of examining options for waste oil and looking at excise tax on fuels.
Commercial banks such as Bank South Pacific (BSP) and Kina Bank and their shareholders had rejected any increase in banking levy.