Prof: Firms do not pay enough tax

COMPANIES in Papua New Guinea, generally, do not pay enough tax, according to a visiting professor.
Prof Mick Moore is a professorial fellow at the Institute of Development Studies at the University of Sussex, England.
Moore told Toktok Bilong Strongim Nesen organised by the PNGAus partnership yesterday that one thing that struck him was that the Government was not raising enough tax from companies.
“In preparation for coming here, as I looked through the recent history of PNG and revenue raising, one thing struck me more than anything else is why the Government isn’t raising more revenues from companies,” Moore said.
He, however, said this was not to say that there was no progress on this since independence.
“If we go back 40 years, there was very little corporate income tax, there was no GST (goods and services tax), both those systems are now in place and they have raised quite a lot of revenue.
“Important development in the right direction. But still it doesn’t seem far enough to me,” he said.
“Companies in PNG generally don’t pay enough tax.
“When I say that, I am not saying it is the fault of the companies because tax collection is a relationship business. It’s a relationship in particular between the tax collection agency and Government on one side and the tax payers on the other.
“If you look at the total amount of revenue that is raised in PNG, as a proportion of GDP (gross domestic product), it is really quite low by comparison with other countries in the world and indeed countries in Africa of a similar kind of income total.
“Is the tax system in PNG fair?
“I don’t have the answer to that. But I understand people pay up to 40 per cent tax from their salary and I think this is really not fair.”