With the economy nose-diving, the country drowning in debt and O'Neill Government facing a serious cashflow crisis, many Papua New Guineans are struggling to survive.
Article by Bryan Krammer.
Tax in PNG: Workers Pay 34% in Tax
Many PNG workers have questioned why they are taxed so much? I explained taxes are necessary to ensure essential services are provided to the people.
For example, policing, judiciary, correctional services, hospitals, and education to name a few, are all funded by tax collections.
Real Problem is Corrupt Politicians
The real problem is that corrupt politicians only end up mismanaging and misusing (stealing) these funds to enrich themselves and their cronies.
They become overnight millionaires on the people's hard-earned tax money.
MPs Pay Only 5% in Tax
However, after making inquiries into just how much salary and wages tax Members of Parliament pay versus ordinary workers, I was shocked to discover that workers pay up to 34% in wages tax while a Government Minister is taxed as low as 5%.
For instance, let's say a worker's gross wage is K400 a fortnight where his employer provides him a company vehicle and medium-cost housing.
Their wages would be calculated as follows:
- Gross Wage K400.00
- Add Taxable Vehicle Allowance K125.00
- Add Taxable Housing Allowance K400.00
- Total taxable salary & wages = K925.00
- Tax on K925.00 = K135.20
Their net take-home pay would be K264.80 (actual pay K400 less tax K135.19).
Average PNG Worker Pays Over 40%, GST Included
What is alarming is that the average Papua New Guinean worker whose gross pay is over K900 can expect to lose up to 30% of his pay in taxes.
Not to mention a further 10% GST when he spends it at the store on goods and services.
Meanwhile, Members of Parliament, Government Ministers, and the Prime Minister are paid tens of thousands every fortnight and only pay between 5%-13% tax.
Members of Parliament Pay
Gross fortnight pay K14,600
Less K1,280 tax and K668 retirement benefit
Net take-home pay K12,600. (Wage Tax represents only 8%.)
Government Ministers Gross fortnight pay is K25,400
Less K1,300 tax and K1,330 retirement benefits
Net take-home pay K20,100.
Where the tax represents only 5%.
- Prime Minister Gross fortnight pay K38,000
- Less K5,100 tax and K2,000 retirement benefits,
- Net take-home pay K30,900.
What is shocking is this is nothing compared to what corrupt Members of Parliament steal in DSIP and Development Funds annually.
It is interesting to hear Union leaders who have close associations with Government Ministers publicly announce they do not support the one-day boycott on Friday, yet very silent about their workers' welfare.
What is absurd is that these Union leaders feed from the workers' contributions just like Politicians are paid by taxpayers' money only to end up stealing from them.
As a Member of Parliament, it would be one thing to be paid well if we actually earned our wages by running the country properly.
MPs Proposed Pay Increase
I have received information that the O'Neill Government is proposing to increase MPs wages and backdate the increase to 2016.
The justification is the sharp increase in the cost of living (CPI).
What is absurd is that the O'Neill Government is responsible for the sharp increase in the cost of goods, so Members of Parliament may give ourselves a pay rise but what about the rest of the country who essentially pays for our wages.
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Post and image: Facebook/Bryan Kramar
An article by B. KRAMAR outlining the high tax paid by PNG workers in October 2018 - was reposted.
