21 Aug 2003

PNG prime minister hopes tax deal will quell autonomy calls

4:35 pm on 21 August 2003

The Prime Minister of Papua New Guinea, Sir Michael Somare, says he thinks that giving provinces a bigger slice of goods and services tax will end calls for autonomy.

Several of the country's 19 provinces have called for a similar degree of autonomy to that granted to Bougainville.

Sir Michael says that since 1995 there had been a greater concentration of services in the national capital, Port Moresby and all VAT money goes to the national purse.

Sir Michael says the provinces want some of this tax and it is this type of power sharing they are talking about, not a desire to break away.

And he says the arrangements under the new GST should satisfy them.

"I believe that once you're with the GST now of the recent change in the constitution that there would a formula derived at, the formula would be if they are collecting their taxes in the provinces. Two thirds should be in the province one third should go back to the national purse, and I think people are quite happy with that."