Six-month no GST for selected items in Papua New Guinea

News that matter in Papua New Guinea

Six-month no GST proposal for selected items in Papua New Guinea

PORT MORESBY: The Papua New Guinea (PNG) Government has proposed to remove the 10 per cent Goods and Services (GST) for six months on selected basic items vital for household goods and foostuffs.

Treasurer Ian Ling-Stuckey said the removal also covered items that included fuel products (petrol, diesel, kerosene and zoom).

He said the proposed changes were aimed at reducing the rising cost of living pressures (on Papua New Guineans and others) caused by the Russia-Ukraine War (in Europe).

Ling-Stuckey said the GST removals would reduce 10 per cent of the costs for the selected items. (see chart for details).

But, how much of a relief impact are these measure really going to have on consumers? Will this be off-set by the imposition of “super taxes” on super-profit businesses like BSP, Digicel and Telstra

Details of the proposed changes to GST were published by The National:







GST cuts to fight inflation

March 24, 2022The NationalMain Stories

Ian Ling-Stuckey

By LULU MARK
THE Government has proposed to remove the 10 per cent Goods and Services Tax (GST) for six months on selected basic items vital for household goods and foodstuffs.
Treasurer Ian Ling-Stuckey said the removal also covered items that included fuel products (petrol, diesel, kerosene and zoom).
He said the proposed changes were aimed at reducing the rising cost of living pressures (on Papua New Guineans and others) caused by the Russia-Ukraine war (in Europe).
Ling-Stuckey said the GST removals would reduce 10 per cent of the costs for the selected items. (see chart for details)
Ling-Stuckey tabled the proposed changes to GST in Parliament yesterday under the Additional Company Tax (Amendments to the Income Tax Act 1959).
“We are now going into consultations with businesses and partners to ensure that all of the implementation details are in place.
“We expect to introduce the GST legislative changes after endorsement by Parliament next month,” he said.
(Apparently to overcome the GST revenue losses to the Government)
Ling-Stuckey said the Treasury was increasing taxes on parts of the economy that were super-profitable, in particular the banking and telecommunication sectors.
He said the Government was proposing changes to the Market Concentration Levy passed by Parliament as a K285 million revenue-raising measure for Budget 2022.
“We are also making these changes in line with the expected temporary nature of the Russia-Ukraine-war.
“This means the GST cuts will also be temporary with a view to a maximum of six months.
“The reductions will be paid for in full with increased revenues from Kumul Petroleum dividends and Minerals and Petroleum Tax collections.
“This makes the cuts entirely consistent with Budget 2022 and work on budget repair.”
Ling-Stuckey said the three major companies likely to be affected by the proposed “super tax” (passed by Parliament yesterday) were Bank South Pacific, Digicel and Telstra, and key ministers and regulators had been consulted.
As a result of the discussions, Ling-Stuckey said the amendments moved yesterday had the following implications:

  • REMOVING an on-going tax on the telecommunications sector on the assumption that the sale of Digicel Pacific to Telstra proceeds;
  • IMPOSING a fair tax in recognition of the high historic levels of overall profitability from Digicel Pacific;
  • DEFERRING the payment of K190 million in tax on the banking sector to a single payment not due until Sept 30; and,
  • CHANGING the name to Additional Company Tax.

“We know that some will not like the outcomes but this is a sovereign government acting in the interest of all the people of PNG in this critical work of budget repair during the most extraordinary and difficult times,” Ling-Stuckey stressed.

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