Tax not good for SMEs: Official

THE new small business tax (SBT) is good for the micro sector but not the small-to-medium enterprises (SMEs) sector, the Micro, Small and Medium Enterprise (MSME) Council says.
President Desmond Yaninen said the SBT would only ensure lower tax payments by the micro sector.
“Within the MSME, we have micro, small and medium enterprises, the current small business tax is great for micro enterprises who get to pay lower taxes,” he said.
However, he added that the SBT needed to be amended to suit all.
Yaninen also said the council was working on a tax proposal to be included in the 2022 budget which the Department of Treasury would consider to include in the new taxes they do every year.
The Internal Revenue Commission (IRC) commissioner-general Sam Koim previously said when launching the new SBT that it would reduce all tax filing obligations.
“We believe that it will tick one of the boxes in the ease of doing business in Papua New Guinea, that is the reason why this particular regime has been passed in Parliament under the Marape Government,” he previously said.
“We also recognise the Government’s initiative to tie in tax compliance to the SME compliance stimulus package that it is releasing.”
Koim said businesses with annual turnover below K60,000 paid a flat tax of K250 annually.
“If your turnover is above K60,000 but below K250,000, the payment that you will be paying, quarterly is K62.50,” he said.
Koim said successful small-to-medium enterprices operators often did not go to banks or have Investment Promotion Authority certification because of regulatory requirements and instead they opted to keep their money.