Tax laws

Draft report offers solutions to income tax laws

The report with its findings and recommendations was accepted by relevant public and private sector stakeholders at a seminar on Friday 24th June 2022 in Port Moresby.

“The goal is to tailor the best tax regime for the benefit of our people,” CLRC secretary Dr. Mange Matui said.

The seminar provided an opportunity for key stakeholders, as relevant implementing agencies that would be affected by the recommendations, to provide their final input and position on the recommendations before the report is finalized and submitted to the government later this year,” he said.

“The dilemma is finding a balance between relieving workers and ensuring that the government continues to generate revenue to provide goods and services to the people.”

Eight (8) recommendations in the legal, policy and administrative and socio-economic areas have been proposed, based on the findings of research and consultations conducted across the country in 2021 after the launch of the review.

The recommendations provided solutions to key questions about whether to eliminate or reduce personal income tax, which is the highest in the world. In addition to considerations on tax incentives, the application of personal income tax in the informal sector; superannuation and non-taxable retirement benefits, and other related issues.

“The recommendations also complement the efforts of other relevant agencies regarding personal income tax,” he said.

CLRC Commissioner Martha Koviva said that while the report also takes into account the interest of the government and its dependence on personal income tax revenues, she hopes the government will seriously consider and would implement the report.

“Laws and policies are enacted to ensure that the welfare of citizens comes first and if the current personal income tax regime is inconsistent with national goals and general guiding principles and Vision 2050 which envision a happy, healthy, intelligent, wise and prosperous life. PNG, the government should promote and implement the necessary reforms to address these concerns,” said Commissioner Kokiva.