Proposal to starve tax revenue
THE complexities and difficulties with implementing the Government’s proposed introduction of the production sharing contract (PSC) regime under a proposed organic law will not just retard the growth of the economy, but will ultimately retard the State’s tax take from resource projects, according to the Chamber of Mines and Petroleum.
The chamber said this in response to a 4-page newspaper advertisement by Petroleum Minister Kerenga Kua in The National yesterday.
“The chamber has attempted to inform the minister and the citizens of PNG of the dangers of the path being followed, this is not out of personal interest,” chamber president Gerea Aopi said.
“The minister, in his advertisement, refers multiple times to further ‘legal provisioning in consequential Acts of Parliament’ to suggest that the issues the chamber have raised are not relevant and will be solved in the future.
“This goes to the core of the matter; much of the proposed changes have not yet been defined. It is uncertainty around the proposed changes that will prevent investment in PNG. An investor will not invest if there is uncertainty in how he will recover his investment and make a profit.
“Few people in PNG understand how PSCs work, the chamber has many members with detailed understanding on the pros and cons of PSC systems.
“The chamber is thus a voice based on deep knowledge that should be heard in this debate.
“Getting the fiscal settings wrong for the resource sector in PNG will be disastrous for many Papua New Guinean livelihoods.
“If PNG is going to progress as a nation, there is a need for rational and pragmatic policy settings.
“PNG is blessed with mineral and petroleum resources, but they are worth nothing unless they are first found and then developed.
“Developing the resources within a fair and transparent framework will grow the economy, provide jobs, opportunities and infrastructure and ultimately enable other non-resource sectors of the economy to flourish.
“Whether we like it or not the economy depends on the resources sector.
“Payments from the resources sector through taxes, royalties, levies and dividends make up close to 30 per cent direct Government take and constitute 85 per cent of PNG’s exports.
“Indirect contribution to the economy through the multiplier effect likely more than doubles the direct impact of resources projects.
“The resources sector supports employment for hundreds of thousands of Papua New Guineans directly and indirectly.
“The resources sector supports entire regional and rural economic ecosystems, almost singlehandedly in some cases. Given this background, any radical changes to resource laws and regulations needs careful consideration.
“The chamber is alarmed at the minister’s proposed changes and their likely impact.
“The chamber is very focused on working with the Government on policy settings that responsibly grow the economy for the benefit of PNG, it is not a special interest group working against PNG’s best interests.
“The PNG Chamber of Mines and Petroleum is committed to facilitating investment in PNG for the benefit of the nation.
“And we stand ready to be part of consultative discussions with government, for the sound future of our country’s resources sector.”
4 comments
GA have you been to Malaysia, Japan and Australia. These countries have mining acts that their collection of taxes start from exploration, extraction, process and sales. How dare you say PNG economy will collapse because the country’s government position on resources sector for fair equity is currently under review. People like you have been providing dishonest advice to the government and under PMJM we want a fair share. We give you our land free of rent, you dug up the resources and process it, we give you tax holidays, you make billions dollars over the years tax holidays. This time around, no more sub-standard advice. We expect honest analysis of how much of mining and petroleum industries have falsified declarations and averting paying taxes. What more taxes have you dishonestly not disclosed to us? GA we know what the happening and don’t .
Investors/Exploiters have stolen so much from our resources and giving very little back to Land owners and PNG. GA, you are one of the elites of this nation, only concerned of your own remuneration package, which you find comfort in, while multitudes of your fellow citizens suffer, because of ignorance from people like you. I salute our Prime Minister, PJM, Go ahead and fight for better benefit sharing from our God given resources.
GA is not providing any alternative. He is simply the same rhetoric. “No Let’s Protect the Devil.”
Large Corporations like to decorate people like GA and he is trap in a disease called Corporate Syndrome.
We have few Papua New Guineans like him around.
GA – the World of Oil and Gas are running on Production Sharing including our very neighborly (Indonesia) and where is the cave he has been sleeping?
GA – you have been the country manager very recently from Oil Search and I believe you have visited Kutubu and Wasemi or Gesege or Tugiri or Sisipia. I believe he actually witnessed how the living condition is after Kutubu poured out Oil 30 years ago .
It is sickening to hear people like GA say the Chamber views this and that… Afterall who is the Chamber? The same guys who are extracting our resources….
It’s pity….It’s a shame….
GA is not providing any alternative. He is simply speaking the same rhetoric. “No Let’s Protect the Devil.”
Large Corporations like to decorate people like GA and so he is trap in a disease called Corporate Syndrome.
We have few Papua New Guineans like him around.
GA – the World of Oil and Gas are running on Production Sharing including our very neighbor (Indonesia) and where is the cave he has been sleeping not knowing whatis happening around?
GA – you have been the country manager of Oil Search Ltd very recently you resigned from Oil Search and I believe you have visited Kutubu and Wasemi or Gesege or Tugiri or Sisipia villages to see the actual living condition. I believe he actually witnessed how the living condition is, after Kutubu poured out Oil for the last 30 years.
It is very sickening to hear people like Gerea Aopi say the Chamber views this and that… Another advocate is Ila Temu- the brother of Dr. Puka Temu. Afterall who is the Chamber? The same guys who are extracting our resources….
It’s pity….It’s a shame….
Gerea Aopi and Ila Temu…. advise your…PNG has come of age…..
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