Photo credit: Ian Ling-Stuckey
Additional company tax on the banking sector will increase from 30 to 45 percent treasurer Ian Ling-Stuckey said when presenting the 2023 budget in parliament recently. This is expected to raise K240 million in 2023 to fund core vital services.
The additional company tax was initially imposed on companies declaring huge profits such as BSP and Digicel PNG LTD, for 2023 the government will repeal the tax by replacing it with a imposed increase in company tax for all commercial banks from 30 to 45 percent, according to the Treasurer the government is taking several different measures to increase revenue collection for the country and the company tax is one way that the government is expected to raise K240 million in revenue next year to fund key priority areas.
"Following consultations, we have decided to change the form of the tax introduced on the banking sector in 2022, From the 1st of January 2023, the rate of company tax payable by commercial banks will increase from 30 to 45 percent, this is expected to raise K240 million in 2023 funding vital core services.
We will consult closely with the banking industry for the first half of next year and consider if a different type of tax such as an additional profits tax may be more appropriate from 2024 onwards."
The treasurer said this is part of the government’s efforts to reduce deficits and make way for a budget surplus by the year 2027. In relation the government will also be urging all state owned enterprises to payer higher dividends as well in order to help reduce the country's debts.
Meanwhile, Bank South Pacific Financial Group Limited has assured the public that there would be no increase in its service fees CEO Robbin Fleming gave the assurance to the public after the treasurer announced the increase on additional company tax on the banking sector.
