The Government will begin to properly resource revenue collection agencies to improve compliance so that projected revenues are consolidated.
This will accompany significant taxation measures in the mining and petroleum sector and the logging industry, which are actions undertaken to revamp PNG’s revenue.
K90 million is earmarked for the Internal Revenue Commission (IRC) to resource the state agency to improve compliance and broaden the tax base. The allocation is a 21.6 percent increase (K16 million) from the 2016 appropriation.
The measure above are two of four major tax actions the Government will undertake in its efforts to improve its taxation policy and administrations to boost social and economic development objectives in 2017.
The key actions, among the major policy measures, are the imposition of ‘Additional Profits Tax (APT)’ across the mining and petroleum project developments, and the increase of benefits from unprocessed old-growth logs by reintroducing progressive export duty rate system to capture appropriate resource rent on varying log species.
The other two key measures include increasing the taxable component of employer provided housing benefits and an increase on excise on alcohol and tobacco.
When delivering the 2017 National Budget Speech in Parliament, Treasury Minister Patrick Pruaitch said the measures are predicted to deliver K620 million in additional government revenue next year. This is in addition to revenue projections of just over K9 billion for 2017.
“The 2017 Budget contains significant taxation measure to support the Government’s efforts towards a gradual fiscal consolidation path to maintain macroeconomic stability, support continued economic growth and employment through improved, broadened and strong revenue base,” he said.
The other tax measures include:
- Redistribution of gross profits of gaming machines to increase the government share from 46 percent to 55 percent.
- Increase excise on diesel from 6 toea to 10 toea for maintenance of existing national road networks and to adjust inflation
- Merge bookmakers stamp duty with the ‘Bookmakers Turnover Tax’ (BTT) and increase to 15 percent to simplify administration and encourage individual spending in productive areas;
- Increase departure tax from K30 to K114 to maintain real value of departure tax eroded by inflation overtime;
- Standardise the taxation treatment of corporate income tax, dividend, interest and foreign contractors across all sectors of the economy;
- Repeal double deduction provisions for exploration expenditures; and
- Implement the minimum reporting standards of Base Erosion & Profit Shifting (BEPS).