Economist says PNG tax compliance improvement unlikely

7:26 pm on 29 November 2017

An Australian economist says a surge in revenue outlined in the 2018 Papua New Guinea Budget is not realistic.

Economist Paul Flanagan

Economist Paul Flanagan Photo: ANU

The PNG Treasurer Charles Abel released his first budget on Tuesday as he tries to resurrect the country's moribund economy.

Charles Abel, MP for Alotau in Papua new Guinea.

Charles Abel, MP for Alotau in Papua new Guinea. Photo: The National

Mr Abel said in parliament it was "time to pull our socks up and get on with it"

Paul Flanagan of the firm PNG Economics said it was unbelievable that Mr Abel was expecting an increase in revenue of over 20 percent, or more than two billion kina.

"The assumption is that this money will come from increased compliance efforts, from the tax office. The levels of that, an extra 755 million kina - that's just not believable," said Dr Flanagan.

"He is assuming there will be over a billion extra in dividends from the already cash strapped state owned enterprises. Those sorts of funds just aren't believable," he said.

"There are some wonderful sentiments from Mr Abel, but he has been let down by the realities of PNG politics."