17 Jul 2003

Government decision to give PNG provinces most GST revenue welcomed

5:58 pm on 17 July 2003

The Morobe governor who successfully challenged the legality of Papua New Guinea's value added tax says he's pleased with the government's move to give provinces greater control over their finances.

Luther Wenge's comment comes after the national government said provinces will keep 60 percent of total goods and services tax they collect and the national government the rest.

And half of the government's 40 percent will go to those provinces which find themselves disadvantaged by the new split.

He says PNG's governors are happy with the decentralisation of finances to provinces.

"Most of those provinces did in fact agree that a sixty/forty split was reasonable and in all fairness those provinces which make money they must be given sufficient money to maintain the infrastructure or money making avenues so they continue to make money"

Luther Wenge, Morobe Governor.

In 2000, Mr Wenge won a court battle to have PNG's Value Added Tax declared illegal.

The government announced that it will introduce legislation to replace the VAT with a news Goods and Services tax or GST.