Personal Taxes

Revenue tax legal guidelines on reflection

The task of reviewing the income tax laws in Papua New Guinea, Specifically focused on income tax paid by civil servants and private sector employees, says CLRC Secretary Dr. Mange Matui.

“This review is quite necessary as income tax appears to be very high in PNG,” he said, adding that this is evident from 2014 filings with the Tax Audit Committee.

He said a 2018 internal discussion paper that sparked the review suggested, among other things, that civil servants in particular do not benefit from tax incentives and privileges, and consequently most civil servants who work in cities have been forced to live and work from settlements and Villages and exposing their lives to health and safety risks.

Dr. Matui said the public and relevant stakeholders would be consulted to assess their views on key issues including:

  • the ratio of cost of living to taxable income and whether the tax rate should be reconsidered;
  • Public service tax incentives;
  • whether the government should lower civil servants’ income tax;
  • how the informal sector can contribute to taxation;
  • whether annuity and retirement benefits should be tax-free and
  • other tax issues.

He said the CLRC is also aware of the government’s concerns and reliance on taxes to fund the state budget, adding that CLRC will conduct this review with due diligence.

Dr. Matui said consultations, as required by law, will be held in select provinces, starting with Eastern Highlands and Madang on October 4th and 5th, Simbu and Morobe on October 7th and 8th, and Manus and Oro on Dec. 12th and 13th October and NCD on October 27th.

CLRC also accepts written submissions through November 5, 2021.

The Commission encourages the public, tax professionals and those with practical knowledge of tax or tax matters to express their views by participating in the regional consultations, visiting the CLRC website and the Facebook page.

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