Improving tax administration

RECENTLY, Papua New Guinea showed an increase in tax extraction from the public and private sectors.
Improved tax administration, education, and tax reforms are some of the reasons for this increase.
The fiscal budget is being strengthened because of the aforementioned situation, showing surplus tax revenue over projected tax revenue.
It is understood that the Government’s role and oversight in managing public finance is contributing to the increase in tax extraction.
But increasing tax administration comes with the cost of administration and investment.
Increasing the tax base and improving tax administration through an elaborate public spending programme is considered necessary to arrest a growing public expenditure demand.
The Connect PNG programme, as a public expenditure initiative, it is aimed at unlocking dormant economic resources and markets and increase the tax base of the economy.
There are a couple of weaknesses in the programme.
First weakness is it gives more emphasis to the construction of roads and bridges at the expense of airstrip and jetties. Secondly, this programme is a big ticket item which chews a big portion of public expenditure budget and at the expense of other important things including health care and education.
Based on the aforementioned situations, the Government should revisit and re-look at all transport infrastructure and facilities available in the country.
Rural communities are also connected to urban centers through air, land, or sea transport infrastructure.
The upgrading and maintenance of existing airstrip, jetty, and roads in rural areas throughout the country can perform the same purpose of connecting the country.
A waterlogged district such as Daru or Samarai does not necessarily need a road link and the Connect PNG Programme for connectivity with the rest of the country.
A jetty can be confidently used as an alternative solution to enhance connectivity in such places.
In addition, maintenance and upgrade of existing transport infrastructure is a cheaper alternative compared to building new roads and bridges under the Connect PNG programme.
So what I am trying to say is that the Connect PNG programme can be used as a long-term option.
But in the short to medium term, the Government should consider maintaining and upgrading existing transport infrastructure in line with a sustainable and conservative budget deficit plan.
Furthermore, alternative transport infrastructure has more flexibility than roads and bridges.
Airstrips and airports can provide a flexible schedule for business, personnel, and recreational travel purposes.
Some places such as Kutubu in Southern Highlands and Karamui in Chimbu have the best temperatures, soil, and rainfall patterns for growing the best yield of vanilla and cocoa.
But the appropriate transport infrastructure that will bring the cash crops from these areas to the market is airstrip and jetty.
In Karamui, cash crops are already being transported to the market in Goroka via air transport services.
But options are available for a jetty in the Gulf that will enhance accessibility to the market in New Zealand, Australia, and Indonesia and add value to the farms.
In Kutubu, cash cropping businesses can look southward for export markets.
Infrastructure plays a crucial role in enhancing accessibility and production of cash crops.
Interestingly, in the colonial era, timber landing yards were operating around the Gulf which shipped harvested timber around the country and even exported overseas.
This shows the viability of establishing export facilities in the Gulf.
The Government should use the windfall tax extracted through improved administration in expanding the tax base. Succinctly, the Government should invest in maintaining and upgrading existing transport infrastructure including jetties and airstrip in rural areas.
That will provide a flexible, efficient, and affordable solution to meet business, personnel, and recreational transport needs.
This will also, expand tax base of the economy and help the Government meet an increasing demand for other public spending programmes that will improve the well-being of its citizens.

Mike Haro
AVNSoftware Inc. for Android