Provincial govt shares revenue with city authority

Morobe Province will be sharing vital revenue with the Lae City Authority.

On June 25th, Morobe Governor Ginson Saonu signed and presented the revised Memorandum of Understanding between Internal Revenue Commission and Morobe Provincial Government that will see 20 percent of Goods and Services (GST) revenue be given to LCA.

Governor Saonu said this arrangement is the first of its kind in Morobe and Papua New Guinea.

“This arrangement now allows more funding for Lae City to develop more than ever before. This will then trigger development in the other districts of Morobe as time goes by because Lae is the face and center of Morobe and Papua New Guinea, with emphasis as the industrial hub of the country.”

Governor Saonu said in order to ‘Kisim back Morobe’, it is important to ‘Kisim back Lae’ first and foremost.

“An estimated K2.5 million now will be diverted to LCA and this money is needed to steer much needed development for a better and greater Lae City.”

Governor Saonu highlighted that the timing for the funds to be transferred to LCA will be made available soon after all necessary technical aspects of the financial arrangements are cleared from IRC and MPG.

IRC Commissioner Sam Koim said upon Saonu signing the GST component to LCA, a revised MOU was further signed with a trust instrument to have it effected – which was also presented.

Commissioner Koim acknowledged the tough decision made by Governor Saonu.

“The IRC transfers 60 percent of all GST collected in a province back to the province. This distribution is done 21st of every month, which is a reliable source of funding that supports each province’s cash flow whilst awaiting the National Government grants. The GST portion is also not tied to a project. That is the reason why all provincial governments covetously depend on and protect this funding. MPG is now leading the way to share that revenue with LCA.”

Lae MP John Rosso, whilst appreciating the new arrangement, praised Governor Saonu for his decisive leadership to ensure LCA is supported properly with funding.

Rosso said MPG has been supporting LCA with funding occasionally but the timing of the release of those funds had been a problem. With this arrangement, IRC will be paying the agreed portion on time, directly to LCA.

“I don’t think any other Governor would have done this. We have a good Governor who is mature and selfless hence he has agreed to share the GST.”

Prime Minister James Marape said this is the first of its kind, foreshadowing his Government’s thinking on how to empower city authorities to serve the taxpaying community within the municipal areas.

Present during the signing was Prime Minister James Marape, Lae MP John Rosso (Minister Lands & Physical Planning), IRC Commissioner Sam Koim, LCA CEO Neil Elery, Morobe Provincial Administrator Bart Ipambonj, Provincial Treasurer Andrew Namuseh and LCA executives.

Press release