PNG Government's Additional Tax on Bank South Pacific impacts its shares on ASX

 THE Bank South Pacific Financial Group  BSP shares on Australian Securities Exchange (ASX) has shown indication of being negatively impacted by Government’s introduced additional company tax, according to the bank.

Group chief executive officer Robin Fleming said the tax was introduced and passed by Parliament as a levy last November as part of the Income Tax Act for 2022. The tax was subsequently certified on Feb 7 for gazettal.

In presenting the bank’s first quarter report for 2022 financial year, Fleming told a conference yesterday that BSP’s share price on PNGX finished 0.4 per cent higher in the trailing 52 weeks at K12.05, with average prices of K12.21 last month.

He said the ASX price reached an all-time high of AU$6 (about K14.94) after the K1.1 billion profit announcement, but fell after new tax’s confirmation.

“Dividend yields were 14.4 per cent and 13.6 per cent on the PNGX and ASX respectively.

“Large reductions in ASX share price, coincided with the new tax being advanced through the PNG legislative process.

“Larger shareholder gains following the announcement of BSP’s record K1.1 billion profit, were diminished in the sell-off following confirmation of the new tax by Parliament,” Fleming said.

“If we look at the ASX price, it’s around AU$4.95 (about K12.47). It’s been affected in terms of the reduction in share price.

“We need to understand that the share price won’t increase as much as it should have because of the company tax. We reported the first quarter report of K259 million, we should have seen the share price increase.

“But all the shareholders and investors are going to focus on the K69 million because of the company tax.

“So the share price might not go down much more but certainly, it will not increase,” Fleming told The National yesterday.

Meanwhile, Fleming explained that the tax on BSP was originally payable in three installments, but has since been changed to a single payment on Sept 30, 2022.


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