Oro Governor Gary Juffa has proposed to the new government to restructure the existing tax regime in the country as it appeared to be hostile and not friendly to the Papua New Guinea.
Mr. Juffa proposed this while speaking on FM 100 Talk-Back Show on recently regarding what the government really needs to focus on in order to take back PNG.
The government may look at many ways to take back PNG however; Governor Juffa is proposing that the tax regime in the country needs to be restructured first.
“There are frustrations everywhere when it comes to cost of just living and that attributes to the high taxes and its subsequent result of living debt life in Papua New Guinea,” Juffa highlighted.
“Under the existing tax regime, ordinary Papua New Guineans do not have savings because they are not just living on paycheque to paycheque but also living on booking money (debt).
They experience debt upon debt and they hardly get out of debt when they have another issue of tax that they have to deal with and they are back in debt again and eventually everyone is drowning in a sea of debt,” Governor Juffa said.
“This tax regime is not PNG friendly, but it is PNG hostile because Papua New Guineans are not benefiting out of that regime.
That is why my proposal is that we need to restructure the tax regime so that it benefits Papua New Guineans,” Juffa reiterated.
Mr. Juffa said Papua New Guineans pay personal income tax of 35 per cent which is too high compared to most parts of the region where 10 to 15 percent personal income is taxed.
“In PNG, you are paying 35 percent on your income, then you got to pay taxes again on your resignation, retirement, retrenchment and so forth and it is quite high,’’ said Juffa.
Mr. Juffa also suggested to the government some ways of dealing with the issues of tax in Papua New Guinea.
‘’First and foremost, do away with retirement, retrenchment and resignation taxes as you are not going to suffer a huge tax blow to your tax revenues,” Juffa suggested.
If you do that, you will definitely help ease the tax burden on Papua New Guineans. Then you cut down the tax regime from 35 percent to a more reliable rate of 25 per cent. We can actually go down low at 15 per cent, which is still okay,” Juffa said.
“Now, how do you make up the shortfall as people out there may say look if we do that where will we get the revenue.
“Well you have to be creative, innovative, and assertive in collecting the tax but that is not happening.
What is happening right now is that, the tax office wait for people to turn up and pay their tax and then they punished them again while there are heaps of tax payers out there who do not pay tax that the tax office never goes after.
Juffa said those that avoiding paying tax is alleged to be the criminal cartels that are in the resource sectors.
“The forestry industry, fisheries and many organizations for instance hardly pay company tax meaning they have devised very elaborate tax avoidance scam and scheme.”
“One of the reasons is because our taxes are very high which they find it very hard to comply with. If you lower taxes, more companies will actually turn up to pay tax because they will feel that it is reasonable,’’ Juffa explained.
“When you charge high taxes, there got to be tangible returns that they can see, such as infrastructure, public services and so forth so that they can say oh yes, our tax money is really working.
However, right now people cannot see that their tax money is working. So they are bitter and miserable by ways of high cost of living.”
“These are the issues that the government of the day has to deal with and I’m proposing the government to lower taxes for PNGan tax payers especially the workers.
Then what you got to do is that you got to go after aggressively the companies that are not paying the taxes. Those companies that do not want to comply must not operate in this country and leave,” Juffa challenged.
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