Tax revenues higher next year

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THE Government has projected higher tax revenue in 2010 than this year due to higher commodity prices and the expected start of the PNG LNG project.
Treasury and Finance Minister Patrick Pruaitch said total tax revenue is projected to increase by K906.7 million or 18.8% to K5,735.3 million in 2010, compared with K4,826.6 million estimated for 2009.
He said this reflected an increase in domestic economic activities, particularly with the construction on the LNG project, with strong company profits and employment growth.
The Treasurer said mining and petroleum taxes were expected to be higher due to higher commodity prices for oil and copper than in 2009.
He said though strong mining growth was expected in 2010, it would not add to tax revenue due to tax concessions that were provided, particularly, the 10-year tax holiday granted to the Ramu nickel project.
Mr Pruaitch said dividend withholding taxes were also expected to be higher due to slightly higher dividend receipts from Ok Tedi Mining Limited in 2010, while a proportion of profits was expected to be retained for capital expenditure.
“The majority of the tax categories are expected to be higher than in 2009.”
He said non-tax revenue was projected to decline by K338.4 million or 45.8% in 2010 to K400.5 million compared with the revised estimated for 2009.
The very large decrease in non-tax revenue is largely due to there being no injection of funds from the trust accounts in 2010.
The Government is also expecting dividends totalling K585.2 million in 2010.
Mr Pruaitch said these dividends would come from the Bank of Papua New Guinea (K20 million), National Fisheries Authority (K10 million), Independent Public Business Corporation (K25 million), Ok Tedi (K220.2 million) and Petromin (K10 million).