Photo: Greg Pawson
Kina Bank's CEO, Greg Pawson, has announced plans to expand the bank's presence offshore due to the government's decision to increase tax on banks this year. Pawson described the tax increase from 30 per cent to 45 per cent this year as a "disincentive for growth" and said, "We will be bringing forward our plans for offshore expansion."
"We are still very much committed to PNG," Pawson added, "however a tax increase to the banking sector will impact the confidence of our investors who provide us with the capital to expand and grow. A 45 per cent tax rate would be among the highest in the world, if not the highest. We have been reviewing the potential for us to expand offshore, and the proposed tax hike certainly gives us the motivation to progress this."
Pawson said Kina Bank is reviewing all its planned investments for this year, including new regional branches, digital technologies, and concessional lending to small-medium enterprises (SME) and the agriculture sector. "Some of these, including all concessional lending (SME, agriculture and home loans), will be suspended if the tax hike goes ahead," he explained.
"We are vehemently opposed to the tax increase," Pawson continued, "and it will impact future investments, reduce competition, and play to BSP's already dominant market position. Sadly, the treasurer (Ian Ling-Stuckey) has made no concerted effort to consult with the banking sector directly. We will continue to challenge it."
