According to the Papua New Guinea Prime Minister, Manus Island will move to have no corporate taxes at all. This announcement has led to concerns from others that the island could turn into a tax haven in the Pacific.
Prime Minister James Marape made the announcement in Port Moresby during an investor summit. The statement regarding Manus Island’s possible freedom from corporate taxes came as part of a discussion regarding plans to boost Papua New Guinea’s economic prospects. At that time, Marape indicated that Manus Island would be the country’s only zone without corporate tax, so the country would still receive income via taxes in other areas.
More From Prime Minister Marape
Marape did not provide more details at the time and still has not expanded on his statement. When asked, Marape told “Guardian Australia” that the treasurer would flesh out this proposal in the future. As such, the move to make Manus Island corporate tax-free is not set in stone just yet, but it is likely to occur.
According to reports, Marape said that the idea of turning Manus into a tax-free zone came about as a response to the island’s regular negative exposure. This is the country’s method of maximizing the potential gains from its resources.
During his speech, Marape said that Papua New Guinea wants to make it easy for companies to do business there. He specifically said that companies should no longer feel as if they have to rely on favors or deal with paperwork blockages.
What Others Say
The Centre for International Corporate Tax Accountability and Research’s representative, Jason Ward, commented that this proposal was very vague. Despite its vagueness, Ward interpreted it to indicate that Manus Island would be the first province in Papua New Guinea to be a tax haven. According to Ward, this could be a financially helpful option for Australian companies. These companies could run their operations somewhere else but be based on Manus Island.
His analysis also indicated that Marape’s speech implied most people do not see a great deal of economic potential for Manus Island. The move to make it a corporate tax haven would potentially overcome this.
Manus Island Will Still Have Protections
Although Prime Minister Marape indicated that Manus Island would become free from corporate taxes, he still made it clear that illegal activities will not be welcome. He was clear about his support for anti-corruption measures and protections for whistleblowers. Marape and Papua New Guinea want businesses to flourish without worrying about lawlessness, corruption, and bribery.
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