Weekly salary may resolve tax issue

THE debate on personal income tax and raising the threshold level is far from over as suggestions are being made as to how the government should review our tax laws and to ease the burdens of workers.
Northern Governor Gary Juffa, the former Customs chief, took the opportunity to table the issue in parliament, which raised many MPs’ eyebrows.
But his proposed tax code is un­realistic at this juncture.
Incidentally, one cannot deny the fact that the government’s imposition of the various tax regimes is for one main purpose – to raise funds in order to develop the nation.
The revenue from income tax provides a significant proportion to the government’s coffers.
But time speaks for itself and PNG is subject to the movements
of global trade and economic con­ditions.
The government ought to know how to strike a balance between the impact of taxes and the rise in prices of goods and services.
This is an issue that is causing much unhappiness among the low and middle income earners.
What concerns many is that our government has made a lot of noise on this issue but has nothing concrete to show.
Whatever the workers earn is lost to the various tax regimes.
This has made it tough for the peopl­e to improve their standard of living.
To most people, who are logical and rational, the government should have stepped in to ease the burden on its people by either reducing the personal income tax rate, raise the threshold level from K10,000 to K20,000 or more, or review the mi­nimum wages level.
For a developing country such as PNG where poverty and hunger still persist, infrastructure development is lacking and where generating re­venue and attracting investment remain a priority, reducing the tax regime is extremely challenging.
So, we as a nation, have to think critical­ly and look into the issue from a wider economic perspective and come up with a economically viabl­e approach that suits our nation.
In this case, I propose that em­ployees are paid on a weekly basis instead of fortnightly and get rid of the GST as workers are being taxed twice – first on their income and then when they go shopping.
I believe if our fortnight salary is divided into two, then the tax rate would also be reduced thus redu-cing the need to borrow and increa­sing our buying power.
I believe the weekly salary could be a resolution to the constant call for income tax reduction.
As a taxpayer, I have experienced and realised that the imposition of income tax is a need for the government’s coffers.
However, I suggest there should
be various income tax levels de­pen­ding on the amount of wages one earns instead having just one level across the board.
This means for a low income ear­ner, the tax percentage should be less than or different from a middle in­come earner.
Thus, the income tax percentage increases as wages and salary in­crease.
Apparently, our taxation system is adopted during the colonial era.
And this is what is making the people unhappy as it is outdated and no longer suitable today.
In Australia, although workers struggle to pay income tax, they are determined and motivated to pay because upon their retirement or retrenchment, the state is obligated under the Income Tax Act to look after them.
But that is not the case in PNG because the government is not obligated to look after its own people.
I believe paying workers on a weekly basis is better than the current concept. We may take home less but the tax is also less.

Mat
Via email