He said a recent media report indicating that those who earn up to K12,500 a year will pay 22 percent is incorrect.
“Up to K12,500 a year is TAX FREE (increased from K10 thousand and previously from K6 thousand per year),” said Abel in his Alotau District Facebook page.
“From K12,500 to K20,000 is at 22 percent. From K20,000 to K33,000 is at 30 percent.
“For example, if you earn K33 thousand per year, the first K12,500 is tax free, the amount from K12,501 to K20,000 is taxed at 22 percent, and from K20,001 to K33,000 at 30 percent.
“This equals K5,550 or an average of 16.8 percent in tax.
“These rates are all ‘old rates’ and have been in place for many years, except for the changes made in 2019 to increase the tax free amount from K10,000 to K12,500. And increase the 22 percent band from K18,000 to K20,000 (this reduces the amount that would otherwise be paid at 30 percent).
“I've repeated this many, many times but some people are still misunderstanding and the media in this case is adding to the confusion.”