Reduce tax so people have spending power: Council

By DALE LUMA
TAXES should be reduced to give spending power to the people, according to the PNG Manufacturers Council.
In a proposal to the State, the council highlighted that employers were not in a position to increase wages and the government was not in a position to provide cash stimulus.
Increasing take-home pay will increase disposable incomes through the reduction of tax and boost consumer spending and assist the State in a shift to user-pay systems, according to the council.
Chief executive officer Chey Scovell said the call to reduce tax on salaries and wages was to put more kina back into consumers’ pockets and “they will spend and this will support business”.
“Governments are ineffective at distributing wealth, we don’t have a welfare system, the State’s take (in taxes) are far too high for a country that has no welfare or social services and one in which all major infrastructure projects are largely from dinau (loans),” he said.
“The state has lost control of the market, from illicit trade to companies that are not paying their full taxes, not paying proper wages, not paying superannuation.
“The IPA (Investment Promotion Authority) registers thousands of new companies every month, but for more than a decade only about 5,000 companies pay taxes regularly.
“The State needs to get their head out of outdated text books and understand our actual market place,” Scovell said.
“Treasury are not taking note of the actual market. The current and past commissioner’s for IRC (Internal Revenue Commission) and Customs were not being listened too, agency heads are not being listened too and certainly compliant business isn’t being listened too.”