Place your Ad Here!
Marape Considers Tax Incentives
by PNG Business News - July 21, 2021
Photo Credit: The Department of Lands & Physical Planning of Papua New Guinea
Prime Minister James Marape has stated that his government is considering tax incentives, one of which will be a 100% tax break on capital expenditures.
He stated that this was one of the incentives his government was considering implementing to help businesses thrive in the country.
Marape made the remarks while speaking to the business community at a breakfast event on Papua New Guinea's participation in the 2020 Dubai Expo, which will take place in October.
“We also have tax review to attract foreign direct investments,” he said.
“For those of you who are partnering with us in this sort of expo, tax incentives are being looked at.
“Some examples, a 100 per cent deduction for capital expenditure.
“A 100 per cent deduction on assets used in the manufacturing processes.
“Exemption of income derived from the export of manufactured goods.
“These are being looked at.
“A 10-year tax exemption for businesses who are located in some parts of our country, especially the special economic zones.
“Tax policies and incentives are some of the things we are looking at in terms of public policy.
Marape called on the business sector to use the Dubai Expo to promote the country's goods and services.
“When the Dubai expo was presented to us, we thought instead of sitting back why don’t we step out and show the world who we really are,” he said.
“When you have Total investing in PNG when you have ExxonMobil investing in PNG.
“Interestingly enough, ExxonMobil came into PNG in 2007 or 2008.
“And in 2009 we had the global financial crisis.
“At the back of the global financial crisis, ExxonMobil descended into our country.
“Today, ExxonMobil tells me, PNG LNG project is one of the success stories, in fact the production efficiency is at global high as far as ExxonMobil is concerned.
“That in itself is a good story for us.”
Mauludu, Shirley. The National (16 July 2021). “PM reveals tax deduction plan”.
PNG Business News - June 28, 2021
PM: SMEs Have Huge Role to Play
Small and medium businesses (SMEs) have a significant role in economic growth, according to Prime Minister Hon. James Marape. When addressing the 3rd SME Business Breakfast on Friday (June 25, 2021) to commemorate the end of SME Week, he also praised local SMEs for hosting PNG SME Week at APEC Haus in Port Moresby from June 21 to 25. “Thank you (SMEs) for what you have been doing this week,” PM Marape said. “Many nations globally are built on SMEs.” He used the example of neighbouring Indonesia, which has over 50 million SMEs, which he described as the economy's "engine room." PM Marape also mentioned New Zealand, which he visited last year and described as a country around the same size as PNG but with an economy based on SMEs. “New Zealand is a country almost the same land size as ours,” he said. “Their economy is really dependent on SMEs that are based around agriculture, tourism and cottage industries. “This is a place that we could source inspiration from. “Based on those small-scale, SME-based industries, they have a US$200 billion economy that keeps them running.” PM Marape stated that New Zealand's economy is built on agriculture, cattle, dairy, and marine resources, rather than large-scale mining, oil, and gas operations. “I believe in the propensity of our country to expand to an economy that is beyond US$200 million sizes, if not in the next 10 years, easily in the next 20 years we could get there,” he said. “That is simply because of the resource density we have in our country.” “When the going gets tough, the tough get going,” PM Marape remarked as the country went through difficult times. “Those who will be in the mainstream are those who want to capture opportunities that are available for them,” he said. “I speak to our local SMEs: There are opportunities available.” PM Marape stated that individuals working in the SME sector should know that “our Government is pro-business, pro-SME”. “We want to help Papua New Guineans and those that are resident in Papua New Guinea to get going in business,” he said. “We embrace businesses of all types because we are cognizant of the fact that success of business allows the economy of a country to be strong.” Reference: The Department of Prime Minister and National Executive Council (26 June 2021). “PM Marape highlights important role of SMEs”.
PNG Business News - June 28, 2021
PM Marape urges SMEs to venture into agriculture
Prime Minister Hon. James Marape has pointed Papua New Guinea small to medium enterprises (SMEs) to agriculture as a space that they can move into. He said this when addressing the 3rd SME Business Breakfast at APEC Haus in Port Moresby on Friday (June 5th 2021) which also marked the end of SME Week. PM Marape said agriculture could supply domestic needs as well as export to other countries. He said PNG was the closest Pacific country to Asia, including Indonesia right next door, which had a population of 260 million. PM Marape said the majority of Indonesians were Muslims who ate beef. “I wonder why the grasslands of Sepik and Fly are doing nothing,” he said. “Those are places where we can raise beef (cattle) and supply to the 260 million Muslims next door.” PM Marape said the next 100 years would be the “Asian century” as the increasing population there needed more food, water and energy. He said PNG could follow the track of New Zealand in becoming a specialist food producer to supply the population of Asia. PM Marape pointed out the case of Fiji water, which was now sold around the world, and added PNG could do similar through organic food. “Organic food supply to niche markets in Asia can be a forte, can be a specialist area, going into the future,” he said. “Government will look at those concepts and work with the SME Corporation, for those who want to be innovative in the space of SMEs, whether in export-based businesses or domestic supply.”
PNG Business News - July 08, 2021
PM Marape calls on Japan, Australia and New Zealand to open ‘Economic Bubble’ with Pacific Island Nations
As part of their involvement in the battle against COVID-19, Prime Minister Hon. James Marape, MP has called on Japan, Australia, and New Zealand to open up an economic bubble with Pacific Island countries. During the 9th Pacific Alliance Leaders Meeting (PALM), which was held online, the Prime Minister made this request. COVID-19, he added, was not just a health issue but also an economic issue in the Pacific Islands at this point. “In Papua New Guinea we recognize that COVID-19 has had a strong negative impact on our economy,” Prime Minister Marape said. “Speaking on behalf of my 14 other sister nations in the Pacific, especially those who are dependent on tourism or external trade, dependent on fisheries, agriculture and the export of our raw resources, who are totally exposed to the ravages and the damage COVID-19 is causing to our local economies, so we need international trading and commerce for our economies to function. “Papua New Guinea, having recognized the need for our economy to be functional, has elevated our COVID-19 response by way of the passing of a specific Act of Parliament called the National Pandemic Act that defines how we live, work, operate and trade. “We have not closed our borders and we are still open for business to ensure our 10 million people survive COVID-19. “At this juncture, let me thank Japan for your continued interventions and interest in our small Pacific Island nations. They are totally vulnerable and exposed to the contraction of the global economy and the close of international borders. “Therefore I ask for your continued presence in helping us, not just in the area of health but more importantly, on how we can ensure trade and economy remains functional and relevant.” Prime Minister Marape has urged Japan, Australia, and New Zealand to assist Pacific Island nations in keeping their economies afloat by functioning in a special trade and economic bubble that will allow our economy to weather the storm. The Prime Minister also praised Japan's Prime Minister, Hon Yoshihide Suga, for his assistance to the area, as well as Australia, and New Zealand. Reference: Department of Prime Minister and National Executive Council (2 July 2021). “PM Marape calls on Japan, Australia and New Zealand to open ‘Economic Bubble’ with P
PNG Business News - July 22, 2021
Oil Search Considering Merging with Santos
Santos, an Australian oil firm, announced its plan to combine with Oil Search Limited. Santos proposed a non-binding indicative merger last month with the goal of making the two companies the regional energy champions. The proposed merged entity has a market capitalization of A$22 billion (K56 billion), putting it among the top 20 ASX-listed companies and the top 20 global oil and gas companies. This means, among other things, that the merger will have a diverse portfolio of high-quality, long-life assets spanning Australia and Papua New Guinea, a solid balance sheet with ample cash to support expansion choices, and an investment-grade credit rating. The merger plan, if approved, would be conducted through a Scheme of Arrangement in which Oil Search shareholders would receive 0.589 new Santos shares for each Oil Search share held, according to Santos in a market disclosure to the Australian Stock Exchange. Following the scheme's acceptance, Oil Search shareholders would control 37% of the combined company, while Santos shareholders would own 63%. Based on Santos' closing price on June 24, 2021, the ownership ratio suggested a transaction price of A$4.25 (10.92) per Oil Search share. This was a 12.3% premium to the Oil Search closing price of A$3.78 (K9.72) on June 24, 2021, and a 9.8% premium to the Mubadala block trade selling price of A$3865. (K9.92). Kevin Gallagher, managing director and chief executive officer of Santos, said the merger will bring more alignment to PNG, allowing for the development of important projects such as Papua LNG, as well as the creation of new employment and support for the local economy. Santos, according to Gallagher, has proposed a true merger in which ownership of the combined firm is based on proportionate contribution and value. “The strategic rationale for a merger is clear and offers superior value to Oil Search shareholders rather than continuing on a standalone basis. “Santos continues to believe that the Merger Proposal represents an extremely attractive opportunity to deliver compelling value accretion to both Santos and Oil Search shareholders.” Oil Search stated in its ASX market update that it is open to receiving and engaging with any proposal that is in the best interests of its shareholders. While the company's board of directors agrees with Santos that combining the two firms makes strategic sense, the conditions must be fair to the company's shareholders, which the terms proposed by Santos are not. Despite Santos shareholders holding 70% more shares than Oil Search shareholders, Oil Search maintains that the proposed conditions provide just a 6.8% premium based on Friday's closing share prices for Oil Search and Santos. According to the firm, no such proposal has been made at this time. Reference: Post-Courier (21 July 2021). "Oil Search Open To Merger with Santos".
PNG Business News - July 21, 2021
Study Says Sweet Potato Growers Have Received Significant Insights into Customers Buying Habits
In Papua New Guinea (PNG), sweet potato (kaukau) growers have received significant insight into customer buying habits, which is assisting them in identifying new market possibilities. The recent market analysis, which was supported by the Papua New Guinea-Australia Partnership and conducted by the Australian Centre for International Agricultural Research, revealed that an increasing number of consumers in Port Moresby prefer to buy fresh produce from supermarkets, citing convenience and safety as reasons. While this trend may result in fewer consumers at conventional farmer markets, PNG and Australian experts believe it may open up new marketplaces for rural people. “Farmers are looking for stable markets where they can receive more consistent prices for better-quality produce,” said Professor Philip Brown from Central Queensland University (CQU), who is leading the research project. “The research shows that consumer behaviour is likely to support an expansion in the supermarket sector in large urban centres and this is positive news for the farmers. This could allow commercial focused farmers to secure more stable market access.” The study of 353 customers was conducted as part of ACIAR-funded sweet potato research sponsored by CQU and the PNG National Agriculture Research Institute (NARI), which aims to improve sweet potato value chains by increasing the quality of harvested roots. Sweet potato quality and production are improving, resulting in increasing supplies to retailers eager to provide better fresh produce. “The project, with support from the Fresh Produce Development Agency and NARI, is helping farmers to build their business skills and connect with emerging supermarket opportunities,” said Professor Brown. Kirt Hainzer, a CQU researcher who collaborated on the survey alongside NARI researchers, said it was the first study to look at customer behaviour and see what role stores may play in the development of PNG's commercial sweet potato sector. “The research sought to better understand and compare how consumers buy staples from open markets and supermarkets and to explore the preferences for purchasing staple foods as supermarkets increase the availability of convenience staples like rice,” said Hainzer. “Although expanding formal sales represents a huge step forward in developing a commercial sweet potato industry, continued research on consumer preferences and the market for fresh produce will help better understand trends in staple food purchasing and what market opportunities exist for growers.” With over a hundred kinds of sweet potato in the nation, NARI economist Raywin Ovah said the study sought to find out which of these customers preferred. “Not all the varieties are preferred from a consumer point of view. There are only a few that consumers want to be based on the taste or health properties and that is what we want to also find out. Farmers can be provided with that information, so they produce those varieties that the market wants.” One of five initiatives under the Transformative Agriculture and Enterprise Development Program is a project to increase commercial sweet potato production and commercialization in the PNG highlands. The ACIAR program, which is funded by Australia in collaboration with the government of Papua New Guinea, aims to improve the livelihoods of rural men and women through private sector-led development, increased agricultural productivity and quality, and the development of individual and institutional capacity. Reference: Loop (20 July 2021). “Study looks into sweet potato industry”.
PNG Business News - July 21, 2021
Garry: MRA Evaluating K50 Billion Worth of Investments
According to managing director Jerry Garry, the Mineral Resources Authority is evaluating more than K50 billion in investments in the country. Wafi-Golpu, Frieda River, and Woodlark are among them. “We are also looking at the Central Lime and Cement,” he said. “If that project comes on-stream, it will be one of the first industrial mines ever built in the country.” Garry was speaking at a Port Moresby consultation session on the Mine and Works (Safety and Health) Bill 2021. PNG, he added, was home to some of the world's largest mines. “We have grown from strength to strength,” he said. “If you compare the Bank of PNG statistics, the mining sector alone, in terms of production, has exported over K17 billion in 2020 and 2019. “So it’s a huge industry that we are trying to regulate and manage.” Garry expressed gratitude to the industry for making safety a primary priority. “They have been taking health and safety at the workplaces very seriously,” he said. “We must not only consider (the workers) and the environment but also people living around the (areas) we operate in. “And if we are using any hazards, we must also take responsibility.” The newest mining methods in Wafi-Golpu, known as block cave mining, are one of the new things to expect, according to Garry. “New mining hazards will come with this new mining method,” he said. Reference: The National (20 July 2021). “Authority assessing investments worth K50bil”.