Taxes In New Guine[?]

A Comparison Taxes In New Guine[?] And The BSIP

The following comparison tween taxation in Australian Ne\ Guinea and British Soloma Islands, has been kindly supplie by the Financial Secretary of Tl 1 Western Pacific High Commissic (Mr. Alex M. Wilkie). The artier deals particularly with figures whia v)ere published in December issu of “PIM”.

INACCURACIES regarding taxs tion in the British Soloma Islands appear on pages 17, I and 152 of your December, 195 c issue. They come under thre heads: Income Tax The figures quoted by you ai those which applied prior to 195 c By Regulation No. 13 of 1956 th basic rate of tax was reduced froi( 1/3 to 9d in the £ and certain allow ances were increased. The effect a these concessions is that— A single man on £1,050 P-a. pays £56 5 income tax and not .. £B9 5 as stated by you.

A married man on £1,170 P-a. pays £37 12 income tax and not .. £64 6 A married man with 2 children on £1,536 p.a.

Pays £66 5 1 and not £lO2 6 Sur-tax becomes payable on tax able income in excess of £2,000, am not in excess of £1,500 as was prr viously the case.

Export Duty Your article states “that expo:c duties cover all commodities”. Thr. is not correct.

Export duty is payable on copri trochus and green-snail shell, goM and scrap metal; but there is no: export duty on any other coirr modity. Indeed, in 1956, the Hig§ Commissioner announced that n export duty would be levied <x> cocoa for a minimum period of years commencing on January 1957.

Import Duty Your article states that the Solol mon Islands have “a considerable! higher import duty than that o Papua-New Guinea, particularly foi non-British goods”.

Whilst it is correct that the geru eral rate of duty, applicable t goods from non-Commonwealttl countries, is higher than in Neo Guinea (which has only one rate of duty) the amount of none Commonwealth imports is small. J Preferential rates of duty on thU whole compare favourably with thld rates of duty in New Guinea an<n (Oves.

Ulthough some rates are higher, n many cases for articles in common usage such as petrol, fuel ill. radio receivers, cigarettes, beer md motor cars, the rates are sub stantially less.

A number of items, such as Bement and machinery, which are rutiable in New Guinea are free ci the British Solomon Islands i'rotectorate. I attach a list show cig the comparative rates of duty in a variety of articles.

The British Solomon Islands ['rotectorate rates quoted are those [i operation as from January 1, [959. the duty being levied on the ob value and not cif value, pend tig reconsideration of this pro posal.

Who is Better Off?

That is the end of the Financial Secretary's letter, but our article was to show that the longer the residents of Papua-New Guinea are without income taxation, the better. The BSIP Financial Secretary has not proved otherwise.

No private planter or individual in business in the Solomons has any delusions about how much better off his New Guinea counter-part is —at the present time.

The income tax figures were given PIM by the Sydney agent of the BSIP Government; the spokesman for the BSIP agent was apparently also reading from the pre-1956 schedule, and not the current one. After reading the com plicated legal phraseology for some time, he said: "You had better just quote the actual annual tax various classes of individuals will have to pay. This is what we tell people who are thinking of going there."

The Financial Secretary says there is ex port tax only on copra, trochus, green-snail, gold and scrap metal. That, however, is about the extent of BSIP exports at present. In re

visions for the 1959 edition of the "Pacific Islands Year Book", just received, the BSIP Government lists the principal exports, in order of value ' as c °P ra ' trochus, scrap metal, timber and areen-snail Of that list nnlv timhar of

small'importance " reclnt the

tax net. Of total exports in 1957—the last year for which statistics are available—copra accounted for about £1 million of the gross export value of £1,631,543.

In 1958, there may have been a little cocoa ex P° rte d but no mention is made of it although it is stated that somewhat over 100,000 cocoa trees have been planted. In the post-war years when the NG cocoa industry was being re habilitated and expanded, no export tax was levied there on cocoa beans, The comparative import tariff rates are in teresting, but certainly do not prove that P-NG residents are worse off than those in BSIP The real test is the cost of living in both places. PIM has not checked this for about five years, but at that stage the cost of living in Honiara was far higher than in P-NG. It seems likely this state of affairs still exists.

Comparative Tariff Rates

New Guinea BSI Preferential

Bsi

General % % % ••rated water . agricultural imple- 25 m 35 ments 10 free 12* ► cycles uilding materials— Asbestos cement 15 m 35 sheet Building board. 5 17* 35 e.g. Masonite . 5 17* cwt 35 cwt Galvanised iron 5 2/- 4/- Timber 15 17* 35 ush knives . . 15 free free utter free 2* 20 *nfectionery imeras, projectors, cinematographs & 20 20 37* parts ne film, exposed, for commercial exhibition, per 100 25 20 37* ft 1/- 3d 3d I’ment 5 free 17* rothing igines and machinery (other than 10 17* 35 agricultural) . ■ncy goods, orna- 10 free 12* ments, etc . 30 mainly 17* some 20 35 37* our free free 17* iel oil .. per gal. urniture — 2d Id Id [Household .. 5 17* 35 'Other 10 17* 35 imes and toys .. 20 17* 35 amophones rsecticides and 20 20 37* [fungicides free free 17* 'wels and jewellery 30 25 42* irosene per gal. :quor— 5d 3d 3d IBeer .. per gal.

Spirits, bottled, e.g. whisky, gin. 6/3 4/6 7/etc. per gal. 63/- 67/6 82/6 :2at (tinned) free free 17* otor cars 25 17* 25 usical instruments 20 17* 35 irts for vehicles . 20 17* 25 Itrol . . ger gal. holographic 6d 3d 3d 'materials .. 25 17* 35 •tdio receivers 20 17* 35 Ifrigerators 10 17* 35 cwt free free 2/sap free 17* 35 Ktiles l>acco— 10 20 37* [Cigarettes per 1,000 75/- 37/- 43/8 Cut tobacco per lb 17/6 15/- 16/3 [Stick tobacco per lb actors, a g r i - 3/6 4/9 5/1* -cultural free free 12* •itches and clocks 25 20 37*