Nasfund calls for consultation

The National Business

By CLARISSA MOI
THE National Superannuation Fund (Nasfund) has called for a wider consultation between the banks and the shareholders before implementing a proposed tax on the banking sector.
Nasfund chief executive Ian Tarutia said this in response to the recent Deloitte 2021 budget report which stated that the Government could be imposing a new tax on the banking sector in consultation with the stakeholders.
He said it was a proposal at the moment and not part of the 2021 budget hence details had not been finalised as to how the tax or levy would be calculated.
Bank South Pacific (BSP) group chief executive Robin Fleming had previously clarified that any increase would not affect customers but only shareholders, such as Nasfund.
“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, Nambawan Super and Comrade Trustee Services Ltd.”
Tarutia said it was a proposal at this time and was not part of the 2021 budget.
“Details have not been finalised as to how the levy or tax will be calculated,” he said.
“Secondly, a levy of this kind will impact profitability of the banks who are owned by shareholders, especially Bank South Pacific, which is owned by large PNG institutions like Nasfund.
“This in turn will lessen the amount of dividends that Bank South Pacific is able to pay its shareholders.
“We agree with Fleming in this regard.
“We call for further discussion and consultation with the banking sector, the wider community and shareholders before this levy is approved and implemented.”
According to the Deloitte report, the Government has indicated that it will look to impose a “new tax on the banking sector”, intending to introduce it in 2021.
“This was forecast in the 2020 budget, but the Covid-19 delayed discussions with the banking sector,” according to the report.
It said: “Details in relation to how such a levy or tax will be determined or calculated has not been provided.”

7 comments

  • Mr Tauritia, Taxes are unavoidable. Every form of income must be taxed to finance the opreation of this great nation. To overcome this, look for so many baskets to lay your eggs on, so you still have income trickling in to cater for the members of Nasfund.
    I suggest you look at investing in Supermarkets Chains in our major cities. Food is a basic necessity needed everyday, by everyone. Over to you Sir!!!

    • Tax or GSTs are unavoidable to any profitable income earners! But deficit page side of it over the
      years, we have not seen any part parcel of tax returns to every sole playing partners including
      individual entrepreneurs.
      ” Could IRC BILL IN TO ENFORCE TAX RETURN AS WELL this time around.

  • In my view, the governments approach to tax to fund their Deficit budget is an unnecessary stress imposed on the business houses including BSP and other commercial entities. First they need to revisit their budget, keep the deficit at 4bill or less. K6bill is 50% of the present budget-way too much. Shelf some of the projects ear marked for 2021 and 2022 until Pindyang is initiated and Pogera commences production.

  • Mr Tarutia,
    Unlike developed economies around the world, PNG does not have a social welfare system in place to support the retirees (and the unemployed). They rely solely on their superannuation savings and the dividends from the investment when they retire from active employment. By increasing taxes or levies on shareholders of banks such as BSP will impact on the thousands of contributors of Nasfund and other superannuation schemes through reduced dividend distribution. If the government is for the people then it should not apply an indirect tax method to tax on their investments – the superannuation funds. The contributors are already pay income tax to support the budget so why tax them again through this method?
    I may not be an economist nor an accountant but common sense tells me that the proposed approach by the government is simply using the banks as their conduits to draw funds from the Superannuation Schemes to support a budget that envisions on the ‘chicken and egg’ story.

  • There are thousands of Asians doing business in PNG and avoiding Tax at all costs, from Logging to Retailing and now, many have gone into Real Estate. The Government should target tax evaders rather then putting more burden on established institutions that have been compliant. BSP has the biggest operation in PNG and additional tax burden will definitely be passed onto consumers and shareholders mostly ordinary Papua New Guineans through the superannuation institutions.

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