Ian Turutia, Association of Superannuation Funds of PNG president, has been arguing for the removal of taxation on workers’ superannuation funds. He said, “As an industry, we are against taxation on superannuation or retirement benefits.”
A review of Papua New Guinea’s income tax laws by the Constitutional Law and Reform Commission (CLRC) suggested a reduction in personal income tax on wages and salaries. The review also recommended the complete removal of taxes on superannuation benefits. The report has received overwhelming support from the public.
Mr Tarutia said the Association supported the report, along with its recommendations. He had previously spoken out against the number of taxation points in the superannuation industry as they seriously impacted savings. The Association argued for just one point of taxation.
“As superfunds, you pay tax as a corporate entity, that’s 25 per cent. Because of the tax deductibility of employer contributions, that is subject to tax. The interest that’s earned from investment income is also subject to tax. So, there are a number of taxation points within the superannuation industry that impact members,” Tarutia said.
“We recognise, however, the balance of enjoying a tax-free status and the Government raising revenue to provide services (such as) education, health, and infrastructure for our people.”
The Association of Superannuation Funds of PNG wants the government to reduce personal income tax and exempt superannuation entitlement from tax. This would give the populace more disposable income. As an alternative, it suggests increasing the Goods and Services Tax as a more equitable and fair way for the government to raise revenue.
“The findings of the CLRC on personal income tax is timely and supports our position on behalf of over 850,000 Papua New Guineans who are superannuation contributors,” Tarutia said.