admin's picture

PORT MORESBY, Papua New Guinea (Oct. 8, 2002 - Papua New Guinea Post-Courier/PINA Nius Online)---Prime Minister Sir Michael Somare is to be asked to recall Parliament to resolve the tax crisis.

This follows a meeting between one of his ministers and the leading opponent of Value-Added Tax (VAT).

Morobe Governor Luther Wenge, whose court action led to VAT being declared unconstitutional, agreed to take the issue to Parliament after meeting with Inter-Government Relations Minister Sir Peter Barter.

Wenge, a lawyer and former acting National Court judge, said the only forum that would solve the problem was the National Parliament and not the courts.

"The national and provincial governments cannot afford to pay expensive foreign lawyers. It is too costly and the country has enough financial problems," he said.

Wenge said he had discussed the matter with Barter, who agreed with him and added they would ask the prime minister to recall Parliament next week.

Both leaders also separately indicated yesterday that roundtable discussions would be held this week to resolve the VAT matter.

The loss of revenue from VAT would have a major impact on the new Somare Government's efforts at financial recovery. There is also now widespread confusion over VAT collections.

The matter yesterday went before the same Supreme Court bench that invalidated the VAT Act, and was adjourned to next Tuesday to allow parties to solve differences.

The bench, comprising Chief Justice Sir Arnold Amet and justices Gibbs Salika and Ambeng Kandakasi, also suspended the judgment they passed on Sept. 27 and stayed its operation until 4p.m. next Tuesday.

The suspension and the staying of the judgment means that the normal 10 per cent VAT deductions would continue in the business sector until further orders by the court next Tuesday.

Also in court yesterday, counsels acting for the State asked the bench to present their oral evidence in camera for fear of embarrassing the National Government.

Barter took the witness box and gave evidence when the request was made by lawyer Marshall Cooke QC. Cooke said the evidence would center around funding for the Bougainville peace process and the security situation in Southern Highlands Province.

The court adjourned for State lawyers to prepare documents to show why they should present their evidence in camera.

The court resumed in the afternoon without a mention of that application to stop publication and adjourned to next Tuesday at 9:30 a.m.

Cooke, during the hearing, tried to convince the court to grant a series of orders, including directions to re-hear the case and to have the VAT decision reversed.

He touched on the financial implications posed on the country by the ruling of the court made on Sept. 27.

Amet cut in and told Cooke the case during pre-trial had narrowed down the issues and the decision was made purely on constitutional grounds.

Meanwhile, another application triggered by the VAT ruling will be heard on Friday before the National Court.

This application seeks to prevent all the provincial governments, particularly the Morobe Provincial Government, from collecting any form of tax pending the outcome of the application before the Supreme Court.

For additional reports from Post-Courier, go to PACIFIC ISLANDS REPORT News/Information Links: Newspapers/Post-Courier (Papua New Guinea).

Pacific Islands News Association (PINA) Website:   


MELBOURNE, Australia (Oct. 8, 2002 – Radio Australia)---Papua New Guinea's Supreme Court has issued orders to temporarily restore the country's value added tax.

PNG’s government has asked the court to reconsider parts of its judgment that the VAT is unconstitutional and invalid.

The hearing has been adjourned to next week.

Lawyer acting for the government, Greg Sheppard, says the court has moved to clarify the status of the vat while the case is pending by suspending its original judgment:

"I think the practical implications are that the business community can be sure, as can the national government and all of the provincial governments, that all the of vat that they may have collected since the 27th of September can be paid and should be paid."

For additional reports from Radio Australia, go to PACIFIC ISLANDS REPORT News/Information Links: Radio/TV News/Radio Australia.

Rate this article: 
No votes yet

Add new comment