Committee calls for review on tax incentives
Source: Post-Courier, October 29, 2015, 01:39 am
BY ROSALYN ALBANIEL
BILLIONS of kina in
revenue are being lost every year through tax concessions to investors
and recommendations have been made to the Government for a complete
review on this incentive.
This is the finding of
the Tax Review Committee which has recommended the establishment of a
centralised economic development board to coordinate economic
development priorities.
The review of tax
concessions is one of seven recommendations which the committee, headed
by former Tax Chief Sir Nagora Bogan, highlighted yesterday when it
delivered its final report to Treasury Minister Patrick Pruaitch in Port
Moresby yesterday.
Team leader of the Tax
Review Secretariat Kessie Sawang said the review had shown that there
was no over-arching framework governing how the Government gives its tax
incentives, including tax exemptions to companies which are operating
in PNG.
She said that these had
been done on an ad hoc basis at the prerogative of the Government but
added it had resulted in substantial revenue loss.
Sir Nagora said the
committee had looked at exemptions at the extractive industry, noting
that a separate study by the International Monetary Fund says PNG has
been overgenerous.
"So we are saying that Government cuts down all the project-by-project arrangement," he added.
"Under the generic terms
of tax where you treat people like Steamships, Independent Public
Business Corporation (IPBC) now Kumul Consolidated Holdings Limited) and
all the corporate entities the same, why not do the same for mining and
petroleum," he said.
Sir Nagora said the
current project to project negotiations and arrangements were
administratively messy and had stated there was a need for a framework
that is transparent to be put in place.
"We are saying to do away with some of the incentives that we have given away to extractive sector," he
said.
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