Stop issuing of tax incentives, institute report says

 THE National Research Institute has recommended for the National Government to refrain from issuing tax incentives to companies, director Dr Thomas Webster said.

Webster yesterday said that would prevent debt derived from tax holidays being passed on to taxpayers through hefty tax deductions.

“Many of these agreements are secretive.

“If Papua New Guinea is losing out on much needed revenue, then the tax burden is unfairly passed onto the taxpayers of Papua New Guinea, because somebody else is not paying. 

“We are therefore strongly recommending that these tax incentives should no longer be offered in the future.” 

While acknowledging the increase in government expenditure on improving much needed infrastructure and services, Webster said the spending had to be reduced. 

“The government will need to spend money on looking after free education, free health care and many of the infrastructure projects. And indeed with the expansionary policy over the last couple of years, the budget deficit has increased and there’ll be more money needed to repay the debts that have been incurred. 

“But that debt should not be passed onto the taxpayer, we should relieve the taxpayer. The government should itself reduce its expenditure in the some of the areas they say are for public good.”

He said money has to be put back into people’s pockets.

“Let’s reduce the total budget expenditure by not taxing and putting money back into people’s pocket and reduce the total expenditure of government. In that way the government may achieve the greater good in collecting taxes and spending on development of Papua New Guineans.”

He said the government should not increase taxes and rather to reduce government expenditure and the proceeds from LNG and others will cover the balance of government expenditure requirements overtime.