“There are very worrying reports that the 2019 Budget will introduce a new turnover tax on mobile phones. This would be a shameful tax that the Alternative Government would possibly oppose. A smarter PNG will rely on lowering the price of mobile phone communications, not imposing new taxes just because of the government’s economic mismanagement. PNG’s mobile phone costs are already amongst the highest in the world according to the PNG National Research Institute – please don’t make them even higher!” stated the Shadow Minister for Treasury & Finance Ian Ling-Stuckey.
”As part of the 2019 Budget, the government is considering introducing a turnover tax on mobile phone companies such as Digicel, Telikom and Bmobile-Vodaphone. We all know that the companies will pass this tax onto consumers. So PNG’s internet costs, SMS costs and phonecall costs will all go up and be paid for by ordinary papua new guineans, as a result of the 2019 Budget.
“The PNC government is totally out of touch with the people of PNG. The Treasurer is willing to spend money on expensive fleets of cars for APEC, but then goes to pay for such cars with new taxes paid by png citizens, which increase the high costs of living burden already facing PNG families. So last year the Treasurer imposed great big tariff increases on items such as chicken and milk-totally contrary to the APEC theme of trade liberalization. Then in this 2019 budget, he imposes more cost of living increases on mobile phones – totally contrary to the APEC theme of “Harnessing the digital future”, one of the two key themes for APEC. PNG should be encouraging the new mobile phone technologies that can improve financial inclusion and PNG’s integration into the Asia-Pacific region. Imposing a new tax on this digital future is economic lunacy” stated the Shadow Treasurer.
“Turnover or “gross” taxes are a very distorting form of tax. They are not based around profits (such as company tax) or value added (such as the GST). They create perverse or unacceptable side effects – so the government would like internet prices, SMS texts and even phonecalls to become more expensive because this gets them more tax. Why does the government want such a new tax? Because they want to help pay for their failure to control wage costs and public debt costs. This new turnover tax will increase the cost of living. PNG families once again are going to have to pay for the economic mismanagement of the O’Neill-led PNC government” said Mr Ling-Stuckey.
Hon.Ian Ling-Stuckey,CMG.MPShadow Minister for Treasury & Finance
10 November 2018
A joint PNG National Research Institute and Deloittes accounting paper in 2016 concluded that PNG’s internet prices were the most expensive in the world.
More recent research by “Howmuch” indicates that PNG has by far the highest internet costs in the Asia-Pacific region. The Monthly cost in PNG was USD590.60 when it was only USD57.20 in Fiji, USD79.00 in Samoa and USD60.40 in Australia. So while internet prices have come down, PNG still has extraordinarily high internet costs.
Indeed, when going through all the countries in the world, the only country which now has a higher rate is Burkina Faso in Africa. But at least in Burkini Faso you can have a spacious apartment in the country’s capital at USD460 per month –much less than Port Moresby!