Government Set to Discuss Formula for Collecting Provinces’ Share of VAT
Port Moresby, Papua New Guinea
The government has announced plans to discuss a formula for collecting the provinces’ share of Value Added Tax (VAT) in the near future.
Establishing a Fair and Transparent Method
According to sources, the discussion will focus on establishing a fair and transparent method for allocating the VAT revenue among the provinces. This move is seen as a significant step towards decentralization and greater autonomy for local governments.
Background: Tax Reform and VAT Introduction
The move comes at a time when the government is pushing ahead with its plans to reform the country’s tax system, including the introduction of a new VAT regime. The VAT is expected to replace several existing taxes and duties, including the Goods and Services Tax (GST) and other excise duties.
Current System: National Government Retains Majority Share
Under the current system, the National Government retains a significant portion of the VAT revenue, while the provinces receive a smaller share. The proposed formula for collecting the provinces’ share of VAT aims to ensure that each province receives a fair and equitable allocation based on its population, economic activities, and other factors.
Stakeholder Involvement
The discussion is expected to involve representatives from the provinces, the National Government, and other stakeholders in the tax reform process. The goal is to agree on a formula that reflects the needs and priorities of each province, while also ensuring the overall sustainability of the country’s tax system.
Pressure for Greater Autonomy
The government has been under pressure to address the issue of provincial revenue sharing, with many calling for greater autonomy and financial independence for local governments. The proposed VAT regime is seen as an opportunity to address these concerns and promote more equitable distribution of resources across the country.
Stay tuned for further updates on this developing story!