‘Super tax’ deferred to July
News that matter in Papua New Guinea
‘Super tax’ deferred to July
PORT MORESBY: Prime Minister James Marape says the Government’s
proposed super levy or tax on two “dominant industry players” – Bank South
Pacific Group Ltd (BSP) ans Digicel – will not be implemented until the
mid-term review in July (or after General Election 2022).
“We took heed of calls that they might go broke.
Treasury called for consultation two years ago,” Marape told Parliament in
Budget 2022 debate yesterday.
“Taking K190 million from BSP and K95 million from
Digicel could cause them to go broke.
“We will defer implementation (of the super tax) to
after July,” he added.
PNG Cyber Monitor reproduce several news reports from Parliament as published by The National:
No ‘super
tax’ until July
December 1, 2021The
NationalMain Stories
PRIME Minister James Marape says the
Government’s proposed super levy or tax on two “dominant industry players” –
Bank South Pacific Financial Group Ltd (BSP) and Digicel – will not be
implemented until the mid-year review in July (or after General Election 2022).
“We took heed of calls that they might go broke. Treasury called for
consultation two years ago,” Marape told Parliament in Budget 2022 debate
yesterday.
“Taking K190 million from BSP and K95 million from Digicel could cause them to
go broke.
“We will defer implementation (of the super tax) to after July. For those who
smoke and drink, we have not increased excise duty. For all workers, we have
not increased your taxes, for all businesses we have not charged additional
tax, except BSP and Digicel which I committed to hold back implementation until
the mid-year review,” he said.
The Opposition slammed Budget 2022, describing it as unrealistic and some
budget promises that were unachievable. Shadow Treasurer Joseph Lelang said the
budget lacked transparency, with a lot of the funds centralised and kept in
Waigani, Port Moresby.
“Very little is going out to the provinces and to support other important
functions of Government,” he added. Government Business Leader MP Rainbo Paita
told
The National that the budget was passed by voice.
“Parliament will resume today as we still have some papers, legislations,
amendments and a couple of Government business in the notice paper, including
ministerial statements,” Paita said.
“As soon as that is done tomorrow, we might rise on Thursday.”
Marape said: “This is a milestone budget because it is the first budget to hit
K20 billion. For the first time since 1975, our economy will surpass the K100
billion economic threshold.
“Three years ago, in my maiden speech in Parliament as Prime Minister, I said
we will be the richest black Christian nation and in 10 years we will be a K200
billion economy.”
Govt bracing
for new variant: Wong
December 1, 2021The
NationalMain Stories
He said with the Delta variant still causing havoc and the Covid-19 pandemic
placing a lot of strain on the health sector over the last 20 months, the
country along with the global community continued to learn and adapt.
“The pressures we have faced have exposed long-standing gaps in public health,
and amplified the chronic inequities in health service delivery,” he said.
“From this crisis our Government is using our resources wisely to reset and
rebuild our health care system (through):”
- DEVELOPING a more integrated approach into
increase investment in health with improved infrastructure; and,
- BUILDING stronger and more resilient
partnerships;
“The health sector sees an increase in core funding
of K2.55 billion in the 2022 Budget allocation.
“This is a 46 per cent increase on the K809.6 million on the 2021 budget
allocation.”
Wong said the several critical areas in the budget that needed to be
highlighted that impacted the lives of people in every district and province
were:
- 6,000 Christian Health Services, Catholic
Health Services nursing and other staff captured in the Alesco Payroll
system in 2022;
- INCREASED funding support for medical supplies
procurement and distribution; and
- ALLOCATION of the long overdue K15 million for
the nurses awards.
“The K2.5 billion health sector budget for 2022 is
inclusive of the operational costs of K569 million, accounting for 22.3 per
cent of the total health budget.
Plan missing, says Kapavore
POMIO MP Elias Kapavore highlighted the lack of a
10-year national health plan during debate on the 2022 Budget yesterday.
He said the health sector had received an increase in the funding allocation
for next year, hence it was important that the plan 2021-2030 was ready for the
implementation of the budget.
He said in next year’s Budget, K62 million was allocated to the Covid-19
emergency response but it was not clear if the Health Department had a
nationwide response plan or not.
“I am not sure whether if there is a plan to control the allocation of funds,”
he said.
“This is mainly due to the fact that there is no national health plan to
determine the key priorities and expected outcome
“The previous health plan covered the period 2011 to 2020.
“This means that in the past 11 months the Health Department has expanded
hundreds of millions of kina without a plan which is a key Government policy
document and is required under Section 4 of the National Health Administration
Act of 1997.”
Introduce levy in a time frame, says
MP
AITAPE/LUMI MP Patrick Pruaitch hopes Treasurer Ian
Ling-Stuckey considers a limited time frame for the implementation of the
“dominant player levy” proposed in Budget 2022.
The former Treasurer said the time frame would make way for new entrants into
the two particular sectors that would be impacted by the levy.
“The levy could be viewed as an attempt to spread out the benefits from the
economic sectors that are still doing well.
“A limited time span should enable the Government and Bank of PNG to actively
seek out new banking entrants.
“More competition, along with foreign involvement, is desperately needed in
this sector,” he added.
Pruaitch said the Government had inherited fiscal and economic challenges from
past policies.
“These have led to a decline in the formal sector employment since about 2013
or 2014 and is suggestive of a need for policies that promote an economic
turnaround.
“As a result of the Coronavirus (Covid-19) pandemic, and the closure of the
Porgera mine, the pace of job losses has persisted and the future remains
clouded with some uncertainty.
“The Treasurer has pursued an extremely difficult course, obtaining record
levels of budget assistance from Australia and Japan.
“This has been made possible because of alignment with the International
Monetary Fund. More such assistance has been made available in the Budget 2022,
including grants from Australia to bolster our key health and education
sectors.
State can raise revenue
JUSTICE Minister Bryan Kramer says the Government
has to demonstrate that it can raise revenue in difficult times, so has
proposed the super levy tax on Bank South Pacific (BSP) Financial Group Ltd and
Digicel.
He told Parliament yesterday that the argument was whether the decision was
fair, from a commercial point of view, on BSP and Digicel.
“We are in difficult times, the Government has to demonstrate that it can raise
revenue so it can continue to borrow to keep the economy going,” Kramer said.
“I am sure the good Minister for Treasury will take the opportunity to sit down
with those main players and put in place some guidelines and understanding on
how to make it fair so it is not only targeted at them but everyone has to pay
their fair share.
“If you make super profits in the time of a pandemic, you can’t play the
victim. If your business closes and you put the employees off, you are the
victim, not a K900 million profit after tax. So I am sure based on discussions
with the Treasurer, those industries to reassure them in terms of going
forward, what is the best way in the application of this tax.
Bird suggests levy should apply
equally to all
TREASURY should defer the implementation of the
dominant industry levy on banking and telecommunications sectors until its full
impact on the people and economy is determined, East Sepik Governor Allan Bird
says.
Bird, who is the Plans and Estimates Committee chairman, said the committee was
concerned about the proposed levy that would be imposed on Bank South Pacific
Financial Group Ltd (BSP) and Digicel when the levy is imposed.
“We note that this is a tax on super profits and should apply equally to all
companies and not just two.
“Some 500,000 people pay income tax and we need to protect them and their
benefits.
“We do not believe that tax measures should be punitive, discriminatory or
directed at specific companies.
“We believe there are other tools available through regulators, the Central
Bank and National ICT Authority, to bring about a fair level playing field for
all businesses in the respective sectors.
“In the case of BSP, we note that it is 90 per cent Papua New Guinea- owned and
is the most successful home grown company operating internationally,” he added.
Bird urged the Government not to let misunderstandings between Government and
Members of Parliament ferment in the decision to implement the proposed tax on
BSP.
“The committee suggests that the District Services Improvement Programme and
Provincial Services Investment Programme funds be cut by K3 million or that the
treasury delayed the implementation of the new levy until its impacts are
determined.
Plan lacking:
Namah
December 1, 2021The
NationalMain Stories
“The Government has no strategic plan for raising internal revenue. For a long
time now, internal revenue has been at K11 billion to K13 billion. Now it wants
to increase internal revenue to K16 billion, after shutting shut down Porgera,
forced delays in Papua LNG and in getting the Wafi-Golpu of the ground.
“The Government also forced the closure of 14 forestry projects, including the
processing plants which cost 7,000 jobs.
“Where is the internal revenue going to come from? Stop speaking flowery
language, let us be realistic.
“The Government can only put excessive pressure upon the Central Bank to raise
more money, to print more money and that will squeeze liquidity and interest
rates up, thereby crippling local businesses, including small-to-medium
enterprises (SMEs) and Micro SMEs.
“Taxing the banks and mobile company will pass on the cost to our people. BSP
will probably withdraw from non-profitable towns and outstations, branches and
it will move to towns and cities where it can make money.
“The people will be the biggest losers in this budget and in this bad decision
to tax the commercial bank and Digicel,” he added.
Namah said the Government had been passing legislations to set up Kumul
Minerals and Kumul Petroleum companies in the country but “these companies will
further dilute their operations and will only declare a dividend back to the
Government.
“Instead, the full amount should go into future generations funds and be parked
in the Sovereign Wealth Fund.
“Unfortunately, I do not see any proactive measures on this by the Government.
“The large amounts of capital expenditure funds are being put away in central
agencies which have neither the mandate nor the capacity to undertake such
capital projects,” he added.
Namah referred to the case of National Planning and Monitoring Department which
was allocated more than K2 billion for capital investment.
“Why park such a large amount of money in the department when you can give it
directly to the districts and provinces.
“We do operate trust accounts and operating accounts.
“This is not a friendly Government to business and our people.
“It is definitely not friendly because it has demonstrated very clearly with
its budget, unless it is revised. It will be very irresponsible of any MP to
support this budget.”
“I am calling on the prime minister to withdraw this budget, have it reviewed
and bring it back two weeks from now.”
MP seeks
realistic figures
December 1, 2021The
NationalMain Stories
IALIBU-Pangia MP Peter O’Neill is
urging Government to be realistic with figures it highlighted in the Budget as
most were “not true”.
He said some revenue estimates were overestimated.
O’Neill said the Opposition would support a Budget if it was for economic
stability and lowering of taxes that encouraged investment in the country.
He stressed that the K16.1 billion revenues in 2022 would come from dominant
players as indicated by Treasurer Ian Ling-Stuckey.
“But other taxes such as goods and services, salary and wages taxes, corporate
taxes from companies is where the bulk is coming from,” he said.
“While the economy is struggling, we are squeezing the businesses; we are
squeezing our people as well.
“I urge the Government to talk to the super funds, how much has the members
withdrawn for the past three years?
“People are struggling to survive and are withdrawing their retirement funds.”
O’Neill said reforms such as ceasing recruitment and retiring aging population
in the public service among others should be undertaken to decrease
expenditure.
“The K13 billion allocated for Government operational spending in 2022 is too
high,” he said.
“In fact, it’s more than what the country gets in revenue.
“We need to look at this expenditure.
“Debt level (in the) last few years has been difficult, many people jobless due
to the pandemic.
“We should be living within our means.
“Even having a deficit budget, try reducing it to manageable level.
“If you want a dominant levy (Government-proposed super levy) do it across the
board but also relieve other minor players in the industry so that they can
invest more money and expand their competition ability to compete with dominant
players.”
Alotau MP Charles Abel also raised concerns on the proposed super levy saying
the Government has to understand the wider implications of such decisions.
Abel said: “The levy on Bank South Pacific Financial Group Ltd and Digicel has
implications on an already depressed private sector.
“These two companies contribute a lot indirectly into the rural communities
through their branches and tower networks, many of which are uneconomical.
“I fear that the wider impacts of these levies will far outweigh the short-term
revenue gain projected by the government.”
Prime Minister James Marape said the proposed levy would not be implemented
until July.
Parliament passed the Budget for next year by voices after a marathon debate.
Better
quality infrastructure sought from K8.7bil investment
December 1, 2021The
NationalMain Stories
THE Government’s 2022 capital
investment budget of K8.7 billion is aimed at the development of quality
infrastructures, says National Planning and Monitoring Minister Rainbo Paita.
Speaking during the Budget debate in Parliament yesterday, Paita said this was
to link the provinces and particularly the rural areas in the country.
Paita said some of the projects included the Connect PNG road programme,
including the Pacific Marine Industrial Zone project in Madang and others.
The K8.7 billion budget is a critical component of the K22 billion National
Budget for next year and is a 21.9 per cent increase on last year’s
appropriation of K6.8 billion, according to Paita.
The 2022 capital investment budget includes the Government’s direct financing
of K5.85 billion, concessional lending of K1.31 billion and donor grant
financing of K1.57 billion.
“The infrastructure tax credit scheme in 2022 will complement the budget to
deliver key infrastructure projects to relevant districts and provinces,” he
said.
“This budget is framed against a tight fiscal environment induced by the
prevailing Coronavirus (Covid-19) pandemic, which continues to affect economies
globally and PNG is no exception.
“The capital investment programme is a key expenditure plan of the Government
that is structured to deliver economic growth.”
Paita said there was a need to restructure the economy to strengthen the
foundations for growth.
“It is against this backdrop that we are structuring this budget to make
strategic interventions to keep the economy afloat,” he said.
Paita thanked donor agencies that had contributed and increased the grant
component in “our project improvement programmes this year”.
Budget lacks
transparency, funds kept in Waigani: Shadow treasurer
December 1, 2021The
NationalNational
SHADOW Treasurer
Joseph Lelang says the 2022 Budget lacks transparency because a lot of the
funds are centralised and kept in Waigani.
He told Parliament yesterday that very little was going out to the provinces
and to support other important functions of the Government.
“A total allocation of K13,423 million (K13.4 billion) is classified as
operational funds in the 2022 Budget expenditure. Of this amount, a total of
K2,605.5mil is kept in miscellaneous with the Department of Treasury and
Finance.
“It is kept here in Waigani.
“When we look at the capital budget of K8,751.8mil, again a total of
K3,077.7mil is kept in the administration sector; where Department of National
Planning takes a share of K2,090.2mil; Treasury Department K240.3mil and
Department of Prime Minister and NEC (National Executive Council) K394.5mil.
“Again, it is kept here in Waigani.
“We need to allocate more funding to the provinces because that is where our
people are. Only four provinces aside from the Autonomous Region of
Bougainville got increased funding – Gulf, Northern, National Capital District
and Hela.
“Aside from the five mentioned, total budget allocations to provinces
(recurrent and conditional grants to provinces and LLGs, public investment
programme and grants to LLGs) to all the provinces were reduced overall by a
net of K264.3mil in the 2022 Budget compared to the 2021 Budget allocations.”
Lelang said provinces that received cuts in the 2022 Budget included:
- MOROBE (a cut of K113mil);
- EASTERN Highlands
(K38.9mil);
- WEST Sepik (K36.5mil);
- MADANG (K35.9mil);
- WESTERN Highlands
(K33.5mil);
- MILNE Bay (K25.5mil);
- SOUTHERN Highlands (K26.6
mil);
- EAST Sepik (K23.1mil);
- CHIMBU (K22.1mil);
- EAST New Britain (K22.1mil);
- CENTRAL (K21.2mil);
- ENGA (K17.1mil);
- NEW Ireland (K14.7mil);
- JIWAKA (K13.9mil);
- FLY River (K11.2mil);
- MANUS (K4 mil); and
- WEST New Britain (K510,000).
“The majority of people are in rural
areas and they receive services from their provincial governments and
districts.
“Provincial governments should not be getting cuts in their 2022 Budget
allocations.
“They need funding for provincial infrastructures, roads, bridges, education
and health services, not here in Waigani.
“Provincial governments need funds to confront Covid-19 with the new variant.”
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