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Decentralising sales tax on goods and services

The Acting President of the Autonomous Bougainville Government Raymond Masono welcomed the announcement by Prime Minster Peter O’Neill (The National 2/10/2017) to decentralise the collection of sales tax on goods and services to the provinces. Mr Masono said that before the introduction of GST or VAT, the North Solomon Provincial Government was collecting sales tax on goods and services procured in the province and was doing a good job of it, raising much needed revenue. This made the former province one of the more progressive in the country.

The recently completed Bougainville Revenue and Tax Summit, held from 26-28 September in Buka, explored options to grow the economy, broaden the tax base and increase internal revenue. One of the options discussed was to draw down taxation powers from the National Government to the ABG so it could collect its own taxes. Broadening the tax base and increasing internal revenue is imperative to enable the ABG to attain some level of fiscal self-reliance before the conduct of the referendum on Bougainville’s political future.

“Decentralising sales tax collection to provinces including the Autonomous Region of Bougainville would also address the unfair treatment constitutionalised in the Bougainville Peace Agreement (BPA) where the ABG continues to receive only 30% of all sales tax proceeds collected in Bougainville whilst the rest of the provinces are receiving 70% of GST collected from their respective provinces. It would also enable the ABG to get a better share of taxes on services procured in the region (ARoB) from companies like Ela Motors, Digicel and Telikom PNG,” said Masono.

The Acting President said that there are perceptions that the ABG is not getting its fair share of the revenues collected in Bougainville by these companies and thus the undertaking by the Prime Minister to decentralise sales tax collection on goods and services to provinces next year is a positive move in the efforts to increase internal revenue collection in the Autonomous Region Of Bougainville.

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