The Treasurer, Ian Ling-Stuckley, has announced the launch of a K350 million package to help households deal with the rising cost of living. He said the package was part of a “program of responsible budget repair”. Prices have been rising due to a number of factors, such as the Russia and Ukraine war.
According to Ling-Stuckley, the PNG government’s plan is to target Goods and Services Tax (GST) cutbacks on essential household items like rice, wheat, canned fish, corned beef, cooking oil, women’s sanitary products, and gasoline.
“Given feedback from the community and sectoral interests, we are also examining options for partial or full tax relief on fuel, including import taxes on fuel and excise charges on fuel,” Ling-Stuckley said.
“I have instructed the acting Treasury secretary to convene and continue talks with the Internal Revenue Commission, Customs and the Independent Consumer and Competition Commission (ICCC) to develop a full set of costed options.”
The government conducted a series of meetings with business groups in Papua New Guinea to discuss the best ways to implement the administrative changes.
“The war between Ukraine and Russia continues to impact cost-of-living pressures on PNG families. As announced in the March session of Parliament, the Marape-Basil Government is determined to make life easier for families and small businesses through GST tax cuts.
“As previously stated in response to some industry groups, just cutting income taxes will only benefit the small proportion of our people in the formal economy, and even then, there will be no benefit for those on minimum wages as they already pay no income taxes. The preference is GST and fuel excise and fuel import tax cuts.
“We need to work with businesses to determine a fair, efficient and fast way to deliver these tax cuts. We need to work with the ICCC to ensure these tax cuts are passed on to families. I am listening to advice on the proposed household items to benefit from a GST cut.
“I am very concerned about the health of our people, including the increase in obesity levels, which increases the chances of diabetes and heart attack and other health conditions. On this basis, I have recommended the removal of sugar from the proposed GST tax cuts with savings allocated to other key household items.
“I look forward to the outcome of consultations with local businesses on how best to deliver these important cost savings for our families,” Ling-Stuckley said.
“I understand that our businesses will need to make these changes, and there will be some costs. I hope they understand that this is important for our people.
“It is also good for business in that the increased spending power to our families also means that businesses will benefit from that.
“The good, steady hand of budget repair and responsible fiscal management under the Marape-Basil Government and quick responsive targeted and balanced understanding the cost of living pressures on families, targeted tax increases through the additional company tax on those that can afford to pay, and targeted tax reductions flowing through to all families and businesses.”
Image source: Forex Sie
