Tax will affect workers’savings

IMPRESSION of Market Concentration Levy (MCL) will affect the 850,000 plus super members when the Bank South Pacific (BSP) pays to the Government in September.
Workers salaries, wages and allowances are taxed by the government through the Internal Revenue Commission (IRC) and the portion of fortnightly pay deduction remitted to the two superfunds in the country is for savings for each worker’s future and not for manipulations.
Equitable crediting of interest is expected by workers from respective superfunds (Nambawan Super Ltd and Nasfund).
Consequences of levy will explicitly have multiplier effects on the members of superfunds because Nambawan Super Ltd (NSL) and Nasfund are the shareholders of BSP.
When the levy is paid as already proposed to and directed at the commercial banks by the government, the profit level of the bank will be curtailed leading to further reduction on the returns (dividend) to superfunds, resulting in less interests to be credited to the NSL and Nasfund members accounts.
Salaries, wages and other allowances of both the public and private sectors are taxed and the net payments are also taxed through value added tax (Vat) on the purchases of goods and services putting most hard working employees in awkward financial positions.
MCL tax is introduced to be paid by the financial institutions (BSP), however given the shareholder capacity and monetary returns (dividends) it may affect the super member savings for individual employees in the future.
Prior to proposing new taxes, the government should assess the most likely impacts that may come about as a result of such taxes.
The government is people’s regime and therefore any government of the day should support its people to receive maximum benefits in the form of goods and services including encouraging financial savings not prescribing new taxes to discourage the very committed and industrious workers.
One may ask how would such additional tax ordered by government likely be affected by commercial banks particularly BSP affects the workers, it is the interest that matters the most when crediting to NSL membership account because superfunds are shareholders of BSP.
Indeed, superfunds dividend payments that would be credited by BSP will be less than what superfunds used to receive prior to the introduction of MCL and that definitely further reduces interest calculations for super members.
The Workers Unions, PNG Teachers Associations, Public Employees Associations and other registered groups should analyse the situation properly and ask the government to rescind the application of MCL payments would be facilitated by BSP as ordered.
If you are a current member of the superfund (NSL), you must seriously stand against MCL because I for one believe that the levy will affect our member account in terms of annual crediting of interest by NSL and Nasfund to member account.

Jack Anis Kukiwa