How Our Government is Taxing Us Like Foreigners!

By NATHAN DINGU

You all must be pretty tired of this topic being repeated so often without anything being done about it but hey, the more we talk about it, expose it and ridicule it – sooner or later something will be done about it. So let me show you how our government is taxing its own citizens similar to that of foreigners or even more so.

We have a so called minimum wage limit set at K8000.00, but hey, it is only for that group of people. The rest of us have to face the full brunt of the TAX man. Yes, all Papua New Guineans are taxed at a 30% flat rate right across (that is, if you are not married). This literally means that out of every K1000 you earn – we are subject to pay K300 to the government for its so called services. Yes that is ONLY 10% less than an expatriate would but we all know that all expatriates are exempted from paying tax because the companies who bring them in pay for their TAXES!

What makes me sick about the above is that the tax rate is simply flat – our government does not care whether you are a citizen of this country or not – we have to pay that flat amount year in year our for all our working lives – hey the good thing is that you can pay less if you have a family but we all know the cost of living with more than one person!

To further demonstrate how our government is treating us like foreigners, let me show you how our Pacific neighbors, Solomon Islands taxes its citizens. Before I go on let me remind you all that they have only one gold mine and only one oil palm plantation apart from fisheries and logging. This is an extract from their booklet from their IRC Division “A Guide for Employers – Personal Tax Exemption Thresholds Changes:”

“
What rates of tax apply above the personal exemption?

Income Tax Rates for the year 2012 and future years will now be as follows:
First $15,080 of income is exempt from tax. The balance of income above $15,080 is then subject to tax at the following rates:

$1 - $15000 11%
$15001-$30000 23%
$30 001 -$60000 35%
$60 000 and over 40%

Example
A PAYE taxpayer who earns $50,000 annually will be taxed as follow:

Gross Annual Salary $50,000
Less personal exemption $15,080
Income chargeable to tax $34,920
The first $15000 is taxed at 11% $1650
The second $15000 is taxed at 23% $3450
The balance of $4920 is taxed at 35% $1722
Total tax payable $6822
Gross income $50,000
Less tax payable $6,850
Net Annual Pay $43,178”

So basically what the above means is this, for every one receiving a wage – the government does not tax you at all for the first $15,000.00 that you earn – nope zero it is. Then it is progressive, for every $15,000 you earn from there, there is a progressive tax for that as specified above.

Now let us look back at the PNG system, dollar for dollar or kina for kina (not considering exchange rates) we are being taxed at a 30% tax rate -> this simply means that if you earn K50,000 => we get to pay an annual TAX amount of K15,000.00 compared to a Solomon Islander who would be paying only K6,850 annually if you were paid the same amount!

Outrageous? Certainly! Time for a Change in the Way Our Government Taxes its Own Citizens? Certainly!

We have 10 times more mines than SI does, we have more sea area thus more fisheries, moiré timber, LNG, Oil and yet our government is charging more on its citizens than a country who is earning 20 times less revenue? Is this fair? Certainly NOT!

Can our Good MP’s who are always visiting these pages bring this issue up in parliament?

Nathan Dingu