Raising taxes is not the answer

 IT has been said many times that it is costly to do business in PNG.

Transport costs are high, as are land, rentals and food.

Power rates are not only high but also unstable, la­bour for­ce lack skills, etc.

Yes, PNG offers great opportunities but it is by no means an easy place to operate in.

Apart from the above, an inves­tor would also have to set aside substantial funds for security compared to other coun­tries, recruit more wor­­­kers than needed be­cause of poor attendance and discipline, keep lots of spare parts because none is produced locally.

Sourcing for skilled staff is also difficult as not many are prepared to give up the comforts and safe­-

ty of their current work places to work here, living behind razor wire and constant­ly looking over one’s shoulders.

If one is in export business, the factors are not that much different. 

Who then would want to invest millions of kina in such an environment?

The returns, therefore, have to justify the risks.

Of late, we see many mainland Chinese entering the country but most 

of them set up trade stores and kai bars, which re­quire little skills. 

Many have urged the government to impose higher taxes on foreign-owned companies, suggesting they are ta­king advantage of the country.

Without meaning to of­fend, I view such calls as naive and small-minded. 

Without foreign in­ves­tors, it will take us years 

to catch up with the rest 

of the world.

The government can choose to raise tax rates, which are already one of the highest in the world.

Doing so will risk turning away investors and causing the current operators to pack up and leave.

A country that chooses to impose high taxes must offer something in return such as infrastructure, security, health services, education and so on. 

Does PNG offer them or any at all?

PNG’s tax rates are similar to Australia but look at what the latter offers.

What PNG should be doing is to encourage bu­sinesses, industries and jobs, and produce skilled and disciplined labour to meet the demand.

Our government, past and present, has been ta­king the easy way out by imposing high taxes to fill its coffers.

Each one lacked vision and planning, just like the people who are demanding that foreign companies and expatriates be taxed more.

Over-taxed

Port Moresby