Tax to affect shareholders

By DALE LUMA
BANK South Pacific Financial Group Ltd (BSP) shareholders will feel the impact of the Government’s K190 million proposed market concentration levy when the bank announces its second half financial results for the year, according to the bank.
Announcing the bank’s 2021 full year results yesterday, chief executive officer Robin Fleming said the levy had already been certified.
“At this point, BSP remains of the opinion and strong view that it’s a tax on shareholders and not a tax on the company (BSP),” Fleming said.
“BSP will recognise the full K190 million in our 2022 half year accounts.”
Fleming said the bank had had consultations with Treasury and Treasurer Ian Ling-Stuckey had indicated in his ministerial statement in Parliament that amendments would be made to the proposed levy.
The levy was introduced in Parliament last year as part of an income tax act for 2022 at a flat rate of K190 million for any bank that had over 40 per cent market share.
The levy is payable in three installments and is non-deductible for tax purposes.
Prime Minister James Marape had announced that the levy would not be introduced and would not be applied this year.
“We hope that it does result in a more equitable and fairer outcome for BSP shareholders,” Fleming added.
“But the levy has been certified and as such pending any further amendments in the March session of Parliament, it will be taken up in our half yearly accounts.
“From an accounting perspective, at the time that BSP’s profit exceeds K190 million, then the tax is taken up in full.”
BSP had made a record net profit of K1 billion as part of its 2021 full year results.