By GINNAH MINI
WESTERN Province Governor Taboi Yoto has expressed dissatisfaction with the Income Tax (Amendment) Bill 2026, which proposes an increase in the infrastructure tax credit from 1.25 per cent to 3 per cent, with the funds to be placed with the national government through the Treasury Department.
Treasurer Ian Ling-Stuckey presented the Bill, along with the supplementary budget, in Parliament on Tuesday, 1 September.
He said that given the size of PNG’s resource sector, estimated at K50 billion in 2026, 3 per cent, or K1.5 billion, could be spent on eligible infrastructure projects and matched by a reduction in tax income collection.
“There are directions that encourage investments to take place around the country, specifically of the maximum tax credit of 3 per cent: a maximum of 1.25 per cent can be spent in the provinces, with a project
footprint,” Minister Ling-Stuckey said.
“A further maximum of 1.2 per cent can be spent in provinces outside of the footprint, and to gain the full 3 per cent, the remaining 0.5 per cent of funds must be spent in the Autonomous Region of Bougainville.”
Governor Yoto commended the government for increasing the tax credit but said he was not happy with how it would be distributed.
“This 3 per cent, I think it should only be spent in the provinces where the resources have been extracted, and not to be used for projects elsewhere away from where the project or the resource is found and being extracted,” Governor Yoto said.
“I have been observing that tax payers’ scheme for OK Tedi, national government has been spending it all over the country.”
Governor Yoto said Western Province uses the tax credit scheme to fund infrastructure development rather than budget-supported Public Investment Program (PIP) projects from the government.
“The tax credit scheme of 3 per cent should all be spent in wherever the resource is found—the 97 per cent of the tax is coming to the national government, leave the 3 per cent to the provinces,” Governor Yoto said.