Tax system for smaller businesses

Business

By PETER ESILA
THE Government will use the records from Internal Revenue Commission’s (IRC) Small Business Tax (SBT) regime to reward and fund micro, small-to-medium enterprises (MSMEs) and small-to-medium enterprises (SMEs).
Deputy Prime Minister and Commerce and Trade Minister Sam Basil said this during the SBT launch in Port Moresby on Friday while encouraging around 5,000 small businesses around the country to register under SBT as it was a simple one page return that would help to formalise their businesses. “Last year, we put K80 million into the National Development Bank and K100 million into BSP,” he said. “This year, we want to focus by directly assisting SMEs, but we cannot do that by depending on data that is provided from non-credible sources, we want to use the IRC systems. “We will use these records when we want to give direct support to SMEs and MSMEs. I encourage SMEs that if you are doing business activities on the roads or trade stores or PMVs, you are using infrastructures paid by the tax payers of PNG, we must be fair that all of us must pay taxes.” He said SMEs would be categorised as 100 per cent, 75 per cent, 50 per cent and 25 per cent compliant. “With those rates we will apply the assistance accordingly and reward those very compliant SMEs who are contributing honestly to the economic purse of PNG.” IRC commissioner general Sam Koim said SBT would reduce all tax filing obligations. “We believe that it will tick one of the boxes in the ease of doing business in PNG, that is the reason why this particular regime has been passed in Parliament under the Government. “We also recognise the Government’s initiative to tie in tax compliance to the SME compliance stimulus package that it is releasing.”  He said businesses with annual turnover below K60,000 pay 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,” Koim said. He said SME 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.

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