Phillips says contract workers missing tax axe, aims to address issue
Finance Minister Dr. Peter Phillips has indicated that the Government is looking at the employment practices of businesses in light of a fall off in personal income tax last financial year.
Speaking at a post budget press conference yesterday, Dr Phillips said the Government has taken note of the trend by employers to engage workers on a contractual basis instead of full-time.
He said the Government has seen where this has resulted in a reduction in the amounts collected in Pay as You Earn (PAYE) taxes, and the finance minister said the issue needs to be addressed.
According to the finance minister, the $420 billion collected in revenues for the last fiscal year was less than expected.
He also said, going forward, the government would have to look at ways to improve its collections.
In recent years, trade union leaders have complained that the practice of employing people on contracts instead of as salaried terms undermines workers' rights.
In a debate on a motion brought in the Senate in 2012 Government Senator Lambert Brown, who is a long-time trade unionist, described the practice as exploitative.
At the time, Senator Brown argued that employees such as security guards and workers in the hotel sector were at the mercy of employers as they worked for years and for long hours but were only considered contractors.
He called for the government to make the necessary legislative amendments to put an end to the practice.
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