International Research journal of Management Science and Technology

  ISSN 2250 - 1959 (online) ISSN 2348 - 9367 (Print) New DOI : 10.32804/IRJMST

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A CRITICAL ANALYSIS ON FORTNIGHT SALARY TAX IN PAPUA NEW GUINEA

    1 Author(s):  SIVANATHAN SIVARUBAN

Vol -  11, Issue- 7 ,         Page(s) : 51 - 61  (2020 ) DOI : https://doi.org/10.32804/IRJMST

Abstract

This paper is based on the contextual knowledge on the fortnight salary and wages tax system in Papua New Guinea. The paper outlines the salary and wages definition, fortnight salary and wages tax system, details on the calculations of salary and wages tax under different circumstances and other provisions such as long service payment with the new tax table rate, lump sum payment, leave payment, superannuation, salary packaging, lower housing scheme and annual leave fares. The proposed recommendations on the fortnight salary tax in PNG is based on the knowledge and experience of the researcher, who has been working in PNG for the last 12 years. The current fortnight salary tax system is not really supportive to the workforce in Papua New Guinea. The fortnight salary system rate in Papua New Guinea is still progressing. The marginal utility for the salary increment will decrease while the current marginal rate of tax on the salary and wages remains very high on 42 % for a developing economy in the world.

[1] Corporate Tax (2019), International Training institute, Port Moresby. 
[2] Edgar O., N.  (2005). A Guide to PNG taxation: University of Papua New Guinea Press.
[3] Papua New Guinea, Internal Revenue Commission (2019) Salary and Wages tax table.
[4] Papua New Guinea, Internal Revenue Commission, Source Taxes Guide (2004).
[5] Sivaruban., S, (2018) Fortnight Salary Tax in Papua New Guinea, International Journal of Science and Research (IJSR) ISSN (Online): 2319-7064, 12-14, www.ijsr.net, doi:10.2175/art20183764.
[6] Starting a Business in PNG – 2019, Deloitte PNG, Port Moresby.
[7] Tax Review Committee, PNG Tax Review 2013 -2015 Final Report Volume 2.

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