Fiocco: K2B Deficit A Challenge
In response to one of the addresses of Prime Minister James Marape outlining key economic indicators expected in 2021, President of the Port Moresby Chamber of Commerce and Industry, Rio Fiocco said it would be hard for the government to come up with a K2 billion deficit as said by the Treasurer.
He said this in particular to some businesses which have made a loss and some which have closed down permanently.
“Businesses have had a very tough year last year and so one would expect that the corporate tax revenue will be down further to last year,” he said. “And it will also be a challenge for the government to raise the K2 billion deficit that has been projected by the Treasurer. They are hoping to raise that domestically, but if that’s the case the problem there is if the government borrows or if (and) when the government thinks to raise that through treasury bills or borrowing from the private banks then that comes down to private sector which could have an impact on pushing up the interest rate. So it’s going to be a challenging year for all.”
He also added that the tax accountancy firms are having dialogues on the changes made in the budget for tax this 2021. He said that more consultations should be made.
“So our members are concerned,” he said. “Our chamber along with the other chambers in the PNG chamber would like to have more dialogue with the treasurer and his officials to discuss what tax changes are going to be done and what could be done to assist what the private sector is wanting.”