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‘Tax hike’ that never happened causes a public storm

Tax table (Namorong)
Table: Data from PNG Treasury Department’s final budget outcome documents


PORT MORESBY – Papua New Guinean intellectuals and politicians have erupted on Facebook to fake news emanating from EMTV that there were income tax hikes in the government’s 2019 Budget.

As a sometime government critic, I found myself in the awkward position of almost defending and supporting Treasurer Charles Abel.

So I disseminated the infographic at right showing how much various sectors of the economy contribute to government coffers.

The truth is that workers have been the biggest taxpayers in PNG and big companies have been riding on their coat tails.

Companies call this ‘group tax’, which is mostly comprised of taxes on wages and salaries.

Corporate income tax on the other hand refers to tax paid by the company. In PNG a company is able to pay huge group tax (drawn from employees’ incomes) and almost zero corporate income tax.

So I was baffled when people who I thought were knowledgeable about such matters began to scream on Facebook about hiked income tax. It wasn’t a hike – it was what they’d been paying all along.

I had personal experience of this. In 2013, I did some consultancy work for a company and noticed that 42% of my pay was deducted in income tax.

Since that painful observation six years ago, I’ve pursued tax minimisation strategies with my employers. After all, it’s a painful experience giving half your pay to a corrupt government.

So for me, anyone complaining about 42% tax on Facebook as something new was ignorant of what they had been paying all along.

The Facebook uproar solicited responses from Treasurer Abel and the unions which emphasised how ill-informed people are of the facts.

There’s no doubt that Papua New Guinea needs an overhaul of how it collects taxes not just from the private sector but also its citizens. The good news is that Sir Nagora Bogan’s tax review committee has already provided recommendations for tax rationalisation.

The bad and baffling news is that a tax review paid for by the O’Neill government hasn’t had its recommendations implemented.

In the meantime, it’s wise to remain wary of what the PNG media tells you.


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Michael Dom

Fucketh this government.

Lindsay F Bond

Martin's matrix makes monetary mockery missive.

Does decline of value from the mining and petroleum sector pose a question of potential advantage to the Nation, more especially those folk who uphold the national interest and liquidity (via personal income tax and, goods and services tax), a moratorium on financial activity in the corporate and primary (non-farm) resource sectors?

If not a 'class' war, the matrix make moot such filtering and figuring, not to say firing.

Paul Flanagan

Actually, there was a tax hike from 1 January. But that was increased tax tariffs on hundreds of household items such as tinned fish, flour, chicken, milk and soap.

These will flow into higher prices - some of the tax increases were as high as 25%. There were also excise tax cuts of 30% on "luxury" goods such as perfumes and Sony Playstation consoles.

There were income tax cuts also - none for those on the minimum wage (they pay no income tax anyway) through to K710 per year for everyone earning more than K20,000 per year (including Charles Abel).

I think the PNG shadow treasurer, Ian Ling Stuckey, summarised the 2019 Budget changes well in a recent media release:

"For the poor, the PNC gives no income tax relief but takes higher tax tariffs.

"For middle income earners, the PNC gives some income tax relief but takes back even more in tax tariff increases.

"For high income earners, the PNC gives the maximum tax income relief and then gives them more through cutting excise taxes on luxuries.

“For the poor, the PNC taketh and taketh; for the rich, the PNC giveth and giveth”.

Full responses from the Shadow Treasurer are at

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