State to allow provinces to raise internal revenue


The government is working on enabling provinces to raise internal revenue through small taxation measures as well as larger allocations of goods and services tax (GST) shares.
Deputy Prime Minister Charles Abel, when responding to questions by Northern Governor Gary Juffa, told Parliament yesterday that there was a reduction in the GST flow from some of the provincial governments which the Government was looking into.
“The share of the revenue particularly through functional grants is increasing and going forward, we‘ve had direction from Cabinet to increase the share of GST accrued to provinces,” Abel said.
“We are working on the issue as to what has resulted in GST to some provinces being reduced.
“We want to give some ability to provinces to raise internal revenue through small taxation measures.
“And we want to give larger allocations of GST shares back to provinces.”
Abel said in relation to the question on the amnesty announced by the Internal Revenue Commissioner, there were a range of measures to improve the collection of taxes.
He said it was designed around the penalties and not on the tax.
“In many cases we have a lot of arrears outstanding because of ongoing disputes and lot of those are related to the penalties that have accrued over the years,” Abel said.
“People are using that excuse to continue the debate and not coming in and paying their taxes.
“It’s just an opportunity for taxpayers of PNG to come and clear their books by paying up their entire base tax and in return the penalty aspect of the bill will be forgiven.”
Abel said there was a two-month window to do that. The amnesty was not designed to forgive people the base tax they owed the government.
“It’s simply around some of the penalty provisions and often these penalty provisions can be quite severe,” he said.