By CLARISSA MOI
GOVERNMENT revenue from company tax, goods and services tax (GST), and group tax will continue to be affected due to the slowdowns in economic activity associated with the Covid-19, according to a bank executive.
Bank South Pacific group chief executive officer Robin Fleming said this following the release of Bank of PNG’s monetary policy statement (MPS) last week.
“As Bank of PNG has stated in the MPS, Government revenue from company tax, GST and group tax will continue to be adversely affected due to slowdowns in economic activity associated with Covid,” he told The National.
According to Bank of PNG’s monetary policy statement, governor Loi Bakani noted that the country’s revenue challenges and cash flow difficulties last year saw the Government amending the Central Bank Act that increased advances from the Central Bank.
“Whilst the recently introduced Covid-19 measures have tried to achieve the required balance between health, security and economic activity, certain industries will see lower sales due to the Covid-19 measures and, especially the air transport and hotels sectors, particularly hotels and guest houses outside of Port Moresby,” Fleming said.
He said the Ok Tedi mine shutdown in Western for two weeks recently would also have an impact.
“The ongoing closure of the Porgera gold mine in Enga would continue to affect not just revenues from Porgera but also revenue for businesses and individuals who were reliant on the mine’s operations,” Fleming said.
While commenting on the country’s economic growth and recovery and the rollout of the Covid-19 vaccine, he said without a doubt, the second wave of the coronavirus the country was currently experiencing would have an impact on the timing of and rate of recovery for PNG’s economy.
He said the vaccination rollout was critical for many reasons:
- PROTECTION of front line heath workers who are critical to maintaining health care and services for the broader population who contract the Covid-19;
- VACCINATION of people who work in essential services to reduce the risk of business continuity; and,
- ALLOW key resource projects to continue to maintain operations and to allow those operations to resume work, place measures that permit their employees to have access to Australia which was not available at present due to high numbers of covid in Papua New Guinea.
Fleming also noted that coming to an agreement with Barrick, which is understood to be close soon, was also important to enable work on recommissioning the Porgera mine to commence.