**Western Province Governor Calls for Resource Tax Credits to Remain in Producing Regions**
Western Province Governor Taboi Yoto has expressed concerns regarding the proposed Income Tax (Amendment) Bill 2026, arguing that tax credits generated from resource extraction should be reinvested exclusively within the provinces where the resources are produced.
The bill, tabled by Treasurer Ian Ling-Stuckey during the parliamentary session on September 1 alongside the government’s supplementary budget, proposes increasing the infrastructure tax credit from 1.25% to 3%.
According to Treasurer Ling-Stuckey, the resource sector is projected to be valued at approximately K50 billion in 2026. He stated that the proposed 3% credit could generate nearly K1.5 billion for infrastructure development, offset by a reduction in other tax collections.
Under the government’s proposed distribution formula, the 3% credit would be allocated as follows:
* Up to 1.25% for projects within the province where the resource project is located.
* Up to 1.2% for projects in provinces outside the resource footprint.
* 0.5% dedicated to the Autonomous Region of Bougainville.
While Governor Yoto welcomed the increase in the credit rate, he criticized the proposed distribution model. He argued that funds should not be diverted to projects outside the regions where the extraction occurs.
“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,” Yoto said.
Citing his experience with the Ok Tedi mine in Western Province, Yoto alleged that tax credit funds intended for his province have historically been utilized for projects across the country. He emphasized that his province relies on the tax credit mechanism to fund essential infrastructure, serving as a critical alternative to government-funded Public Investment Program allocations.
Article source: blogger.com | Image credit: Google Help
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