The 2012 budget presented in parliament yesterday included a number of major taxation initiatives, minor policy changes and reforms to tax administration.
“Taxpayers have been facing higher tax burdens due to effects of inflation in pushing inflation into higher tax brackets,” according to the budget papers.
The current tax-free threshold is K7,000. This has been increased to K10,000, meaning a K59 million loss in revenue to the state.
The budget presented by Finance Minister Don Polye also recognised the importance of the Highlands Highway and has increased the tax credit scheme funding for its repair and maintenance from 0.75% to 2% – something which the Chamber of Mines and Petroleum has been asking for.
This will enable projects like the Porgera mine and PNG LNG projects to commit much bigger amounts of money to help with repairing the highway that is fundamental to economic growth.