Marape pledges Corporate Tax cuts upon reaching K200 billion milestone
Prime Minister James Marape has announced a major fiscal incentive for the private sector, promising to slash corporate tax rates once Papua New Guinea’s economy hits the K200 billion target and maintains a growth rate above 10 percent.
Speaking to business leaders, the Prime Minister clarified that while tax relief is the ultimate goal, current fiscal policy remains focused on infrastructure and stability.
Marape revealed that while he has largely maintained tax levels during his six-year tenure, he is prepared to pivot once the economy reaches a position of strength.
"When we hit the K200 billion economy, we will slash corporate tax. Right now, not yet," Marape said during the Business Breakfast yesterday.
He said previous adjustments in personal income tax were evidence of the government's willingness to provide relief during tough economic times, promising the same for businesses once the threshold is met.
Marape addressed the banking industry regarding recent tax hikes, specifically mentioning Bank South Pacific [BSP].
"Only BSP, I want to say sorry, but we’ll get there," the Prime Minister said. "We’ve readjusted this year, and we’ll come back down. Thank you for helping us; you are part of us, so I want to apologize to you and other banking sectors."
He reassured the sector that he intends to honor his commitment to lower these taxes once the fiscal environment allows.
Considering the current climate with 2018, Marape reminded the audience that the economy was previously in recession with a pegged Kina. Today, with the economy growing at approximately 4 percent, he is confident that the nation is on a path towards a stronger currency backed by sound fiscal discipline rather than artificial intervention.
"Central Bank will allow the Kina to find its own strength," Marape said, calling on businesses to partner with the government to bridge the gap between the current 4 percent growth and the 10 percent target.
"If there are any things we could do to assist you, let us know… when we hit a K200 billion economy, we want to drop tax."