Tag Archives: National Budget 2018

Australia ‘GIFT’ a New International Fiber Cable to PNG

1st December

The much talked about New International Fiber Cable from Port Moresby to Sydney will be a ‘GIFT’ from the Government of Australia to the people of Papua New Guinea.

Highlighted in the 2018 National Budget, the 1,800km of Fiber Cable would costs about $USD95m to build and would be in operation in 24 months.

This new Fiber Cable when in operation has the potential to lower internet costs and brings faster speed to Papua New Guinea.

The New Fiber being called as APNG3 and will carry ‘Terabytes of Capacity” can bring up to USD$500 millions annual revenue if managed properly.

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Government Clamps down on Corporate Veil – Corporate Firms pays more Taxes

A look into 2018 National Budget

1st December 2017

Currently, a “corporate veil” exists which does not allow the CG to collect the income tax from the company’s holding company or related companies even if it has been distributed as a dividend or transferred as a non-monetary asset to those group holding companies.

In this Budget, the Government will remove the “corporate veil” to make the parent (holding) company and other groups of companies liable for the tax liability incurred by the subsidiary company. This will allow the CG to collect tax distributed as dividends or transferred as a non- monetary asset to other Group companies in PNG or overseas.

This measure will be revenue positive in the medium to long term and is expected to be effective 1st January 2018.

There are cases where large corporations’ profits generated from business operations in PNG pay little or no income tax with profits paid over to its holding companies largely as dividend payments. The paying of the company’s cash as dividends in conjunction with the reduction in the company’s non-cash assets leaves the IRC unable to collect any outstanding tax liabilities from the company.

These large corporations may have a large tax liability and be stripped of all assets leaving the Commissioner General (CG) unable to collect income tax assessed to the company.

NO NEW TAXES – Tax Payers Delight

30th November 2017

 

The handing down of the National Budget 2018 drew a sigh of relief for averages citizens in the country. For the first time in many years, there was NO NEW TAXES in the budget.

 

The Government has however decided to ensure that the Internal Revenue Commission goes out and does what it is required to do, COLLECT TAXES!

 

The Tax Collection has been lacking in the Commission for many years piling the pressure on the Government to increase taxes in the past. This year, that has been changed and NO new Taxes or any increase in Taxes are included in the Budget.

 

The Government has also removed the “Training Levy” which was supposed to raise K75m in the 2018 budget

Government taken measures to manage wild spendings by SOE’s

November 30, 2017

By ISAAC NICHOLAS

The Government has taken steps to centralise the budgetary process by cracking down on some public and statutory bodies collecting public monies and spend these outside of the Budget.

Deputy Prime Minister and Minister for Treasury and Finance Charles Abel said the Government is serious about improving the fiscal health of the country and this bill is a demonstration of that serious intent.

“Public funds that are raised by public and statutory bodies as non-tax revenue rightly belong in the Consolidated Revenue Fund so that they may be appropriated for expenditure by Parliament to meet the objectives of the Government.”

Opposition Leader Patrick Pruaitch interjected claiming that the bill is part of the budget bills and in normal tradition this bill must be passed along with the budget.

“Why are we dealing with Budget Bills separately when the debate on the budget has been adjourned to next week Tuesday? Can we stop sneaking in stuff? We need to be able to understand the bills and it is part of the budget papers. It is attached to the budget bills.”

Prime Minister Peter O’Neill had to intervene to allow Mr Abel to introduce the bill, make his speech and defer the passing to Tuesday next week.

Minister Abel then proceeded saying that for too long, it has been the practice of some public and statutory bodies to retain, without authority, this non tax revenue to meet operational and other expenditures.

“These expenditures have taken place outside the budget process and this is unacceptable to government. Some, but not all, public and statutory do have legislation in place that purportedly allows them to retain this non-profit revenue, but those provisions have always offended against the best principles of public financial management and this Bill remedies those matters.

The Bill binds all public and statutory bodies. State owned Enterprises are excluded as they are not statutory bodies.

The Bill does not apply to the Bougainville or any public or statutory body created by the Bougainville Government.

The Government has decided to explicitly exempt Kumul Consolidated Holdings, Kumul Petroleum Company and the Kumul Minerals Company from this law as fiscal arrangements to them are currently being reviewed.

https://postcourier.com.pg/govt-cracks-budget-spending-soes/

Tax Revenue to reach K3.2 Billion in 2018

BY GORETHY KENNETH

The new revenue strategy, major tax head contributions to revenue are expected to increase above 2017 levels with personal income tax collections expected to reach K3.2 billion in 2018.

It is expected that company tax will reach K1.9 billion; mining and petroleum tax K179 million, gaming machine tax K174.4 million; dividend withholding tax K137.4 million and interest withholding tax K84.2 million.

For the indirect taxes, GST is expected to reach K1.9 billion, excise cuty K782.3 million, import excise K395.1 million, export tax K330 million and import duties K296.1 million.

Non-tax revenues are expected to be substantially higher comprising fees and charges which are expected to reach K175.2 million. Dividends from state owned enterprises and mining and petroleum projects which are expected to reach K1.3 billion.

The dividends are expected from National Fisheries Authority K400 million, Kumul Petroleum Holding Limited K300 million, Ok Tedi K200 million, Bank of PNG K150 million, Kumul Consolidated Holdings K100 million, National Gaming Control Board K75 million and Motor Vehicle Insurance Limited K25 million.

In addition to this, the newly introduced 90:10 Statutory Transfer rule will generate an additional K565 million comprising one off receipts from the National Fisheries Authority of K400 million, National Gaming Control Board K75 million, Kumul Consolidated Holding K40 million, Mineral Resource Authority K30 million, National Maritime Safety Authority K10 million and the Conservation and Environment Protection Authority K10 million

Grants from donor agencies are expected to total K1024.6 million in 2018. Donor grants are subjected to movements in the exchange rates and policies of donors.

Revenue excluding grants as a percentage of GDP has declined over the years from around 20 per cent in 2012 to 13 per cent in 2017.

The 2018 Total Revenue and Grants Budget is projected at K12,730.7 million, an increase of K1751.5 million or 16.0 per cent, compared to the 2017 Supplementary Budget estimates. A number of the revenue increases are one off in nature and these will be utilised to fund adjustment costs such as clearing outstanding arrears and funding one-off expenditure categories such as APEC.


https://postcourier.com.pg/revenue-tax-expected-reach-k3-2-bil-2018/

K14 Billion for 2018

By : Post Courier

This Government will mobilise necessary resources within the tight fiscal envelope to provide growth conditions to set the pace for future growth and development.

The 2018 Capital investment Budget consolidate key interventions that will encourage business activities, generate employment, increase both export and tax revenues, replace import, and broaden and diversify our economic base strengthening renewable sectors and manufacturing.

A total deficit figure of K1987.2 million has also been factored in, which will be financed through external sources comprising K1613.4 million and K375.8 million from domestic sources.

The financing requirement for 2018 will result in total government debt reaching K25,807.6 million by the end of 2018, equivalent to 32.2 percent of GDP.

There are no new surprises in the 2018 Budget as the government introduces taxation measures aimed at improving revenue collection through greater compliance, broadening the tax base more equitably and efficiently and making tax administration simpler and more effective.

Mr Abel, in handing the 2018 Budget in Parliament, themed “Review our priorities, refocus our energies and reinforce our strengths”, said the government will maintain key priority expenditures in education, health, infrastructure, law and order, agriculture, tourism and small and medium enterprises.

The government has restored the DSIP, PSIP and WSIP in 2018 with K10 million to each district totalling K880 million and provinces to receive K10 million each totalling K220 million and ward SIPs get K64.4 million.

It has also allocated K300 million for administrative and logistics preparation for the APEC meeting next year.

The budget for the first time has given a big boost with the introduction of an economic stimulus package that will cost K665.9 million to grow the economy through agriculture, tourism and SMEs.

Mr Abel said the government is committed to delivering the Alotau Accord 2, as started in the 100-Day Plan, and the 2018 Budget is the second component that should spur economic growth, generate jobs, and empower people through meaningful engagement in economic activities to better themselves.

“The government will continue to invest in key national infrastructure programs in 2018, particularly the Highlands Highway, coastal jetties, the missing link road program, hydro and gas power generation stations and the international submarine cable project,” he said.

He said these are important transformational projects that will reduce costs in doing business, improve market access for rural farmers, and improve and lower cost of communications for businesses and consumers.

“The 2018 Budget will shift focus to generating jobs and business opportunities for our people in agriculture, tourism and SMEs. And it will provide the platform to showcase the best of PNG to the world at the upcoming APEC Summit,” Mr Abel said.