We can’t cut tax: PM

PRIME Minister James Marape says the Government cannot afford to reduce personal income tax because the budget for development and recurrent public service expenditure is higher than the tax collected annually.
Marape said the current expenditure level was between K17 billion and K19 billion annually and the tax revenue was between K10 billion and K11 billion.
He said of the K10 to K11 billion collected in tax, between K8 billion and K9 billion went to recurrent expenditure.
The three taxes collected are personal income tax, corporate tax and goods and services tax (GST).
“I do acknowledge that personal income tax has crept towards becoming the number one tax in as far as the three classifications of taxes are concerned,” he said.
“That means that our workers are carrying the country.
“But, at this stage, we cannot afford to make this critical call (to reduce personal income tax) as yet.
“The demand for services, our development aspirations as well as recurrent (costs) has hit K17 billion to K19 billion a year.
“We don’t have the ability yet to reduce tax because if we do, then it will reduce the revenue we collect.
“That is the revenue we need to fund development budgets, fund recurrent expenditures where the appetite and actual need has now gone up.
“It will very soon up peak at K20 billion if we don’t control the public service expenditure blow-out.
“Leaders request for funds to build roads, classrooms, hospitals but, there is no adequate revenue so we budget to distribute funds to districts and provinces.”