The Constitutional and Law Reform Commission (CLRC) has produced a draft report on the review into the laws on income tax with specific emphasis on personal income tax.
The report with its findings and recommendations was accepted by relevant stakeholders from the public and private sector at a seminar on Friday 24th June 2022 in Port Moresby.
“The aim is to adapt the best tax regime for the good of our people,” CLRC Secretary Dr. Mange Matui said.
The seminar provided an opportunity for the key stakeholders as concerned implementing agencies who would be affected by the recommendations, to provide their final input and position on the recommendations before the report is finalized and submitted to government later this year,” he said.
“The dilemma is to strike the balance between relieving the workers and ensuring the Government continues to generate revenue to provide goods and services to the people.”
Eight (8) recommendations in the area of legal, policy and administrative, and socio-economics were proposed, based on the findings from the research and consultations conducted around the country in 2021 after the Review was launched.
The recommendations provided solutions to the key issues on whether to scrape or reduce personal income tax which is the highest in the world. As well as considerations on tax incentives, application of personal income tax in the informal sector; tax-free superannuation and retirement benefits, and other associated issues.
“The recommendations also complement efforts by other relevant agencies concerning personnel income tax,” he said.
CLRC Commissioner Martha Koviva said whilst the report also considers the government’s interest and reliance on revenue from personal income tax, she hoped the government will seriously consider and implement the report.
“Laws and policies are enacted to ensure the citizens’ welfare is prioritized and if the current tax regime on personal income tax is contrary to the overarching national goals and directive principles and the Vision 2050 that envision a happy, healthy, smart, wise and prosperous PNG, then the Government should promote and implement the necessary reforms to address these concerns,” Commissioner Kokiva said.