Treasury Minister Patrick Pruaitch claim 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.
The Treasury Minister said there be no new changes for other workers who have employer provided accommodation.
“I believe this had been clear to groups that I addressed after the Budget was introduced in Parliament.
“This change will only affect high income earners who are provided with expensive accommodation and it will raise around K6 million annually.”
Pruaitch said 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.
Meanwhile, the Government has also decided to fully tax employer provided accommodation outside of Papua New Guinea because the current exemption for this category is overly generous and unfair from a policy perspective.