17 Oct 2002

PNG government investigates which goods should be tax free

12:13 pm on 17 October 2002

The Papua New Guinea government has begun an investigation into which goods should be exempted from the country's value added tax.

The Fiscal and Economic Commission will investigate the pricing system of various goods and services to decide which ones should be tax free.

This is part of an agreement between the government and the Morobe Provincial Governor, Luther Wenge, after he had successfully challenged the legality of the VAT.

In the deal both parties agreed that in July next year VAT will be replaced with a new goods and services tax, or GST, and that provinces will get 80 percent of the tax revenues from 2004.

Governor Wenge says he is pushing for basic food items to be exempt from the new GST.

"The Economic and Fiscal Commission is to investigate all the taxable items in the country and then thereafter we then will come to the table to negotiate which of the items should be exempted from GST. We're telling them that some of those items should be exempted from tax like basic food items and all those things and with hard economic times they should be reduced."

Governor Luther Wenge.