I AM writing this in light of the prime minister’s call for ideas to be put forward to assist the government achieve better outcomes and Oro Governor Gary Juffa’s agenda to lower income tax for employed citizens.
For a number of years, concerned citizens have been complaining that their take home wages were not enough to meet many of their needs and were associating it with the low poverty indicators.
Even though my suggestion is simple, the concept is not new since some entities are practicing it. It would greatly assist civil servants entitled for housing allowances or Special Domestic Market Allowances in the Public Service.
The only set back would be bureaucracy, lack of knowledge or ignorance by appropriate authorities. The Public Service Minister, secretary for the department, other ministers of the cabinet and heads of departments must take note of it to support their department’s staff’s welfare.
Public Servants in this category are being taxed very heavily, many double times if they are paying accommodation rentals because the allowances they are entitled to are usually added onto their base salaries as their gross pay.
PNG’s progressive taxation policy disadvantages these civil servants whose allowances go back in the form of income tax leaving the poor workers with a net pay equivalent to or just a little fraction over lower ranking officers, therefore it does not make any difference to the kind of position one holds.
Many public servants do not have decent accommodation because of this reason, whatever the position they may hold.
Obviously, civil servants who are affected by the tax regime would not perform to expectations because in the end they are getting paid similar to lower ranking officers and do not live in decent homes.
The only option to alleviate this sort of problem is to have the payroll divisions entertain rental agreements between each department, their employees and registered housing providers so that the employees housing allowances could be paid directly to the landlord.
In this way, the civil servants in this category would be taxed on their base salary only and would be able to live in decent homes.
It should be noted that any amount over the income tax assessable limit is taxed, therefore civil servants must not be burdened by the addition of housing allowances onto their gross wages.
Savings of just K20 makes a lot of differences in the homes, therefore please allow the civil servants to decide whether to collect it in their pay packet or to make direct payments to the housing provider.
The balance can be added onto their wages if the rental agreed upon is lower than the housing allowance allocated each fortnight.