50% Tax hike on income tax threshold by O'Neill-Abel government unfair: Guffa

It is totally unfair for the people of Papua New Guinea to have to pay more taxes when they already pay too much simply to repay unsanctioned loans obtained by the O'Neill regime to dish out inflated contracts to its cronies and friends. The current tax regime is very hostile to PNGeans and genuine investors with PNG's tax rates currently the highest in the Pacific.

A significant portion of illegal and semi-illegal businesses are earning profits, especially in the forestry and fishery sectors as well as property and other poorly regulated businesses, avoiding taxes and getting away with it leaving the shortfall to be met by genuine investors, PNG SMEs and PNG wage earners.
These non-genuine trans-national criminal-type entities were engaged in an elaborate tax avoidance schemes such as transfer pricing and undervaluation, and import export misdeclaration avoiding taxes, and getting away with serious tax crimes while those who fronted up to pay their taxes were being penalized and punished.
Meanwhile, some mine operators were among those who barely pay their full portion of taxes and not a few foreign wage earners were earning an income in PNG illegally while on business and tourist visas.

The IRC is a toothless tiger as it is not enforcing its laws and it is poorly funded with poor welfare and benefits for its workers encouraging corruption and a high rate of attrition of their skilled personal to private entities.
Only when the IRC is properly resourced and employed a more assertive stance towards tax evaders and lowered tax rates would revenues improve.
The Government needs to take drastic measures including setting up a special parliamentary committee comprising MPs from both sides who have the experience and knowledge of such matters to develop strategies both short term and long term to address the issue of declining State revenue mainly through leakage and ineffective taxation administration.

Meanwhile, for an overall improvement in public service performance, I welcome the appointment of Elias Kapavore as Minister for Public Service and I urged him to table the findings of the Special Parliamentary Committee on Public Service which he is a Chair and myself as his Vice Chair.
The report, I believe, is a holistic approach to improving welfare of public servants and introducing corporate values including performance-based contracts for all public servants.

Picture: Oro Governor Gary Juffa buyings fruits at a roadside market in the Highlands