Be sensible with tax reforms: Sir Nagora

THE Government must do tax reforms in a sensible and responsible way by considering all ramifications and anticipated impacts, Sir Nagora Bogan says.
“The biggest considerations are the prevailing state of the economy, the budgetary and revenue implications, implications of Papua New Guinea as an attractive and competitive destination and what is technically considered as the political economy of tax,” Sir Bogan, pictured, said in a statement.
The chairman of the Government’s Tax Review Committee said tax reforms must be introduced in a holistic manner and not sporadically and on an ad-hoc basis.
Sir Bogan said the committee’s recommendation were presented as a holistic package to be coordinated and staged over five to 10 years.
Its recommendations to the Government for the 2017 budget included no new taxes “to ease socio-economic hardship as a result of declining commodities prices and downturn in global economy, post-LNG construction, impact of El Nino and combined effects of some or all of the above”.
It recommended starting tax reform of the extractive sector to make it “more transparent”.
“It must be stressed that the Committee made recommendations to the Government after extensive consultation, technical analysis, robust economic modelling and diligent consideration of what is in the best interest of the country presently and in the medium and long-term,” Sir Nagora said.
“These are just recommendations and ultimately, it is the prerogative of the Government of the day whether to accept or not to accept.”
Sir Nagora said the committee’s recommendations were selectively implemented in the 2017 budget.
He said his greatest concern was whether the estimation of the 2017 tax revenue was rigorous.