Photo credit: LoopFIJI - Des Yaninen
According to Des Yaninen, president of the Micro Small Medium Enterprise (MSME) Council, a reduction in employment nationally reflects the current situation of the economy.
Commissioner-general of the Internal Revenue Commission (IRC) Sam Koim indicated that private sector employment has decreased, as evidenced by a drop in the salary and earnings tax in recent months (SWT).
Employment would continue to drop due to a number of causes, including the Coronavirus (Covid-19), the closing of the Porgera gold mine, downsizing of numerous enterprises, and the postponement of important resource projects, according to Yaninen.
“Employees being laid off are given a lump sum of money,” he said.
“This should be used wisely by starting a small business.
“The National Fisheries Authority is a model organisation in PNG that has anticipated this decline and so are sending over 250 of their contractors to me to undergo financial literacy and SME training.
“While certain sectors of the economy struggle, there will always be a demand for things like food, basic store goods, housing and transportation so SMEs can get into these.
“And if informal sector traders are expected to be formalised and taxed, they must be incentivised to do so.
“They must see the direct benefit getting formalised.
“Right now less than 3 per cent of SMEs have ever obtained a loan and more than 80 per cent of our people still don’t have bank accounts.
“There is K12 billion circulating in the informal sector cash economy.
“SMEC working together with IRC must incentivise informal sector participants to formalise.
“Currently, SMEC (Small Medium Enterprise Corporation) is advertising a small business correspondence course in the newspaper for K380.
“An example of an incentive to the informal sector would be, get registered with IRC and only SMEs with tax identification numbers (TIN) can do the training for a discount of K100 instead of K380.
“These alternatives and more must be presented to the informal sector to encourage them to formalise their businesses.”
Reference: Luma, Dale. The National (15 October 2021). “Drop in employment reflects current state of economy: Yaninen”.
