Uncertainty Remains In Resource Sector – Harris
Uncertainty looms in the mineral and petroleum resources sector as the government looks to introduce a production base tax, says PNG Chamber of Mines and Petroleum Council member Andrew Harris.
Mr Harris was speaking at the PNG Chamber of Mines and Petroleum media briefing yesterday in Port Moresby regarding PNG’s tax take from resource projects. He said in the new amended Act, the State is looking at introducing a production base tax that will affect existing businesses in the industry.
“The resource sector has been focused on tax reform for the last three to four years now… no other sector has had a significant change to it in terms of its taxation for the sector.
More recently the government has announced that they are going to look at the production base tax which also creates uncertainty because it is going to affect existing projects and businesses as well as future businesses.
“There is also a call to look at the climate tax in the resource sector … there’s plenty of fiscal uncertainty in the resource sector at the moment,” he said.
Mr Harris said tax policies are certainly one thing but there are other challenges that investors also consider such as ease of doing business in PNG, investors also look around the world to see what other countries are doing, quality of resources and the world resource prices.
He said with the world economy as it is, it is not the time to increase prices in an industry that isn’t doing so well.
“Treasury is talking to the industry but there is no guarantee that there will be no changes to how resource companies are taxed.
“There’s a lot of changes still to come so when resource companies are asking for fiscal stability it’s because they are concerned the fiscal regime isn’t stable in PNG (due) to a lot of changes, and more corporate changes such as the production base tax yet to come,” he said.
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