Tax Holidays

For P-NG

From a Port Moresby Correspondent While the Administration found itself frequently under fire at the January meeting of the House of Assembly (see opposite), there was one notable occasion when it re ceived the kudos of the elected members—the occasion of the intro duction of the Pioneer Industries Bill.

THIS legislation aims at encourag ing new secondary industries to establish themselves in the Territory.

Bait is a tax “holiday”, for the year the industry commences and for the fol lowing five years. In addition, share holders’ dividends for the same period will be tax free, and any company losses will be allowed as a deduction in the first year after the tax-free period.

It’s a bill that has frequently been asked for, and the Administration was able to claim, rather proudly, that it is an improvement on similar legis lation in some other countries, notably Malaya. It did not mention American Samoa, where there is also pioneer legislation.

Members considered the bill had a good chance of doing what it was de signed to do—that is, make the in vestment climate more attractive and get secondary development.

Primary industry won’t be eligible as “primary industry already receives considerable benefits.”

There was some criticism over this aspect, but it died down later when it appeared that the bill was not too specific on just what industries were pioneer, and that some primary in dustry, such as fish canning, would in fact be eligible.

Eligibility will be decided by the Administrator’s Council, and it seems that the Council will be invited to view things broadly.

Pioneer status may be given a firm that wants merely to export from P-NG, or to a firm which is produc ing goods already being made but whose output can’t meet local de mand.

Status can be given straight manu facturing or processing industries either new to P-NG or new to a par ticular area. It can be given to tourist or transport services, so long as they are not in direct competition with existing services.

Although obviously it will be wait and see when it comes to details, everybody is agreed that the thought is there.