• PNG Business News

POMCCI President – Rio Fiocco Letter to Treasurer Hon. Ian Ling-Stucky

The coronavirus pandemic has had devastating impacts on many businesses, as well as their employees and their families.

In the industrial capital of Lae, the Lae Chamber of Commerce and Industry (LCCI) during the peak of the coronavirus induced lock-down revealed that about 30 per cent of the industrial city’s work force had been laid off.

Whilst it has not been all gloom, according to Port Moresby Chamber of Commerce and Industry President Rio Fiocco – ‘some sectors of the economy have been particularly hard hit’.

He said these include the airlines industry, tourism and hospitality, hotels, restaurants, night clubs and poker machine operators.

“Many of our members have had no choice but to reduce the number of full time employees in an endeavor to save their companies. Sales revenues for most businesses have been down by 30% to 50% during the SOE lockdown period,” Fiocco said.

Many SME's have also been badly affected as they supply goods and services to those businesses that have either been forced to close down due to the SOE Controller's orders (such as PMV's and Taxi owners as well as betel nut sellers) or they have not been able to receive payments.

These were some of the concerns raised with Treasurer and Kavieng MP, Hon Ian Ling-Stuckey in a letter that stated several concerns and offered suggestions and collaboration with government.

“One of the first things the government should do is to settle the long overdue bills owing for goods and services provided to the government.

It is understood many POMCCI members have still not been paid for goods and services supplied to the APEC authority.

“The government should look to dispose of the Maserati's and other surplus vehicles, buses and assets so that those bills can be settled. By paying its long overdue accounts for rentals, goods or services or public servants superannuation contributions this will give businesses a much needed boost,” Fiocco said.

He also suggested looking at a fairer tax system citing that PNG currently has the highest corporate tax rate amongst the APEC economies (30% - same as the Philippines). The average tax rate of the Asian tiger economies is around 22% to 24%.

He said government should look at reducing corporate tax rates as well as the high burden on salary and wage earners and do more to collect taxes from those businesses that are deliberately under-declaring their sales income and their GST.

According to a recent disclosed audit many businesses are even stealing power from PNG Power.

“Our members are finding it difficult to compete against those retailers who are cheating the tax system,” Mr Fiocco said.

The chamber said its members would ‘like to compete on a level playing field’.

It has suggested that the IRC increase the number of audits they do on all businesses, particularly in the retail sector as well as on the extractive sector, forestry and fisheries to ensure the government is collecting the correct amount of tax.

Also touching on capital market reforms, Fiocco said, ‘very few PNG companies are listed on the PNG Stock exchange.

The POMCCI further suggested that the Government should look to undertake capital market reforms to ensure there is liquidity in the market.

It said there must be incentives given to encourage more PNG companies to list on the PNGSX.

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