Opposition renewed calls on Government to amend 2017 Budget

The Opposition has again renewed its call on Prime Minister Peter O’Neill to immediately introduce a supplementary budget each for 2016 and 2017 Budgets in the January session of Parliament.

Opposition Leader Don Polye in a statement said the alternative government proposes that a harsh taxation regime for housing allowances should be abolished.

He has described the government’s new taxation strategy for housing allowance as desperate and harsh.

“This is what I said in our Budget Reply. Taxation strategy for housing allowance is so harsh at the wrong time.

“It is a desperate action by the government to raise revenue when it has mismanaged the economy and country’s cash flow.

“What the Prime Minister has done is that he has tried his best to raise money in the areas that he thinks that he can get away easily when he has run the country’s economy down. I did say that. I did argue that in the Opposition’s Budget reply,” he said.

He said housing tax was not a good one, adding it will push our working class people to the edge of poverty.

Polye said the Prime Minister and his treasurer should review the whole budget for 2017.

He called on them to tell the truth, saying 2017 Budget is not K12.9 billion as claimed but it is more than K21.7 billion.

Polye said his lawyers were working on to establish legal faults in the budget.

He added that once that was done, he would seek an urgent court injunction to stop its implementation next year.

“2016 Budget is also a scam as it was overspent illegally without proper appropriations. It needs correction as well.

However, Treasury Minister Patrick Pruaitch claimed that there had been misunderstanding on taxation of employee provided housing in the 2017 National Budget.

“The 2017 National Budget only extended taxes that have been implemented since 2011 to include two new categories that encompass very high housing rentals.

“Corporate executives with employer provided accommodation where weekly rentals range from K3,001 to K5,000 and those in properties rented for K5,001 or more will pay higher taxes depending on their marginal rates of tax,” Pruaitch said yesterday.

Pruaitch said there be no new changes for other workers who have employer provided accommodation.

He said this change will only affect high income earners who are provided with expensive accommodation and it will raise around K6 million annually.

Pruaitch added that these taxes introduced a greater level of fairness in the system because employees who receive housing allowances in cash are fully taxed at their marginal rates; while those with employee provided housing receive concessional treatment.

Freddy Mou