Tax Review Committee chairman Sir Nagora Bogan is calling for realisation and appreciation of the tax reform.
He said what the people needed to realize and appreciate was that tax reform is complex.
“It involves different stakeholders with diverse interest and trade-off. It affects people across different political, economic and social strata of society.”
Sir Nagora says that it also creates winners and losers, who will vociferously defend their interest, however many of the interests may be contrary to public good and the best interests of PNG.
“But, the ultimate objective is that design of tax reform must take into account what is in the best interest of PNG and its people, not the parochial and self-centred interest of individuals or groups.’’
He said the scrutiny of the political economy of taxation is complex, as many diverse and multi-disciplinary issues need to be taken into consideration.
“In tax policy, distributional issues are important, so getting to sustainability is not going to be just an issue of getting advice on efficiency from economists.”
He said tax policy should be credible, relevant and meaningful and must take into account dynamic settings, including such things as political context (for example elections), institutional settings, culture and legacies, information and communications and marketing, tax debate framing, winners and losers from the reform, organized versus disorganized groups, are all going to be critical.
“Ultimately, a good tax system has to be politically sustainable and political economy would enable deep understanding therefore, a better posturing for political sustainability and meaningful tax reform.”