Port Moresby, January 14, 2024 – Prime Minister James Marape said today his Pangu Government has delivered tax cuts to workers, not tax increases.
He said this in response to ongoing Opposition ‘fake news’ about tax increases by the government.
The Prime Minister said claims by the Opposition about tax increases were designed purely to create political and social instability in the lead-up to the beginning of the no-confidence vote period.
“They are false claims intended by the Opposition to create confusion in the lead-up to next month,” he said.
“The Opposition must correct the record on tax matters and apologise for all the confusion created last week.
“The evidence is overwhelming and irrefutable, and runs counter to every politically-motivated claim about tax arrangements by the Opposition.
“When my government came to power in 2019, the income threshold at which tax becomes payable was K12,500.
“From 1 June, 2022, Pangu increased the threshold to K17,500 as part of its K611 million Household Assistance Package to provide some relief from the cost-of-living pressures facing ordinary Papua New Guineans largely caused by the impacts of the Russian invasion of Ukraine.
“In 2023 we increased the threshold to K20,000 as a temporary measure as part of the second instalment of our Household Assistance Package to help relieve pressure on household budgets.
“Last year, as part of the third stage of our K1,617 combined Household Assistance packag, we concluded that it was necessary to make the K20,000 tax threshold permanent, in the face of continuing pressure on family finances.
“That tax relief, in effect a tax cut, was implemented in the current 2024 Budget as a permanent measure.”
Under this arrangement, Workers who earn up to K20,000 do not pay any tax on the first K20,000 of their income under the Pangu regime.
“Under the prior high-taxing O’Neill regime, they had to pay tax on every toea they earned above K12,500,” Prime Minister Marape said.
“As a result, in 2024 about 160,000 workers who would have paid tax under the high-tax O’Neill arrangements now pay none at all.
“The Pangu changes equate to a tax cut of up to K63.46 per fortnight, or K1650 a year, for all workers paying income tax.
“Furthermore, the tax rates applicable to income over K20,000 have neither changed nor risen.”
Prime Minister Marape also slammed mischievous and false claims about the Dependent Rebate.
“The abolition of the Dependent Rebate, recommended by the Bogan Tax Review in 2015 and legislated for in the 2024 Budget, has not been implemented,” he said.
“To say they have been abolished is a lie propagated by the Opposition to instigate social unrest.”
“I have not authorised the gazettal of the legislation, nor has the Treasurer or any other member of my government.
“The dependent rebates currently remain.”
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