Personal income tax very high, says commission

Business

By DALE LUMA
PAPUA New Guinea’s personal income tax is very high, according to the Constitutional and Law Reform Commission (CLRC).
The commission will conduct a review to gather opinions from the public for changes they want in tax laws.
Commissioner Martha Kokiva launched the terms of reference issue paper on personal income tax on Friday.
The review is set to look at laws on income tax in both the public and private sector.
“It (review) is directly responding to the long-held, genuine concerns of the nation’s workforce,” Kokiva said.
“As far as tax paying is concerned, the workforce has essentially served as the backbone of this country for all these years and more prominently so in this challenging period, induced by Coronavirus (Covid-19) and associated economic downturn.”
Kokiva said review would do justice to the people by allowing them to be part of the consultation process; they would be given the opportunity to have their say as to the kind of changes and reforms they want on income tax, especially personal income tax.
“CLRC is mindful of the Government’s interest as the tax collector and the its reliance on all tax collected to fund the national budget and the key developments and services our people need the most.
“Constitutional and Law Reform Commission will treat the review with due consideration but the challenge is to ensure that our recommendations at the end of the review are practical and appeasing to both the workers and the Government.”
Six issues/questions will be looked at in the review which include:

  • HOW are public servants’ cost of living being affected with to hefty taxation rates charged on their taxable income?
  • CAN public servants be allowed tax incentives such as tax credit schemes, salary sacrifices tax rebates, tax exemptions, tax holidays to be consistent with private sector employees, business entities, companies and statutory bodies and corporations?
  • DO most public servants lack the understanding of personal income tax and tax incentives available to personal income payers?
  • WHAT are the consequences, if any, if the Government decides to reduce the income tax for public servants?
  • WHAT are the viable ways that participants of the informal sector economy can contribute to tax and widen the tax base of the country? and,
  • SUPERANNUATION and retirement benefits should be free of the personal income tax.