IRC to go after tax dodgers for billions of Kina

 News that matter in Papua New Guinea

IRC to go after tax dodgers for billions of Kina

PORT MORESBY: Papua New Guinea (PNG) is missing out on billions of Kina in taxes due to “black economy” businesses, Internal Revenue Commission (IRC) commissioner-general Sam Koim says.

“IRC is improving its compliance activities and will prosecute tax crime offenders soon.

“There is a significant portion of businesses out there who are not complying, especially in the black economy worth billions of Kina.

“There are people moving big money, doing big transactions that are not detected. So, some of the things that we are doing is to dete4ct and also bring them to comply and also file and pay their share of taxes,” he added.

Read on for more details on how the IRC is preparing to go after tax dodgers, as reported by The National:

 

IRC after tax offenders

February 21, 2022The NationalMain Stories

PAPUA New Guinea is missing out on billions of Kina in taxes due to “black economy” businesses, Internal Revenue Commission (IRC) commissioner general Sam Koim says.
“IRC is improving its compliance activities and will prosecute tax crime offenders soon.
“There is a significant portion of businesses out there who are not complying, especially in the black economy worth billions of Kina.
“There are people moving big money, doing big transactions that are not detected. So, some of the things that we are doing is to detect and also bring them to comply and also file and pay their share of taxes,” he added.
Black economy refers to people who operate entirely outside the tax and regulatory system or who are known to the authorities but do not correctly report their tax obligations. “Soon we will be shutting down or deregistering businesses, deregistering Taxpayer Identification Number (TIN) that have not been active.
“One of our projects this year is to deregister businesses that had not been active. We hope to complete this project by April.
“By then we will know how many of the TIN holders are actually in business, but are not complying,” he added.
He said tax crime prosecution was also a “do list”. “At the moment, our data is not set because we are still carrying out that big operation.
“We are having challenges and difficulties in securing other external cooperation.
“For tax crime, in order to do prosecution, it transcends our agency territorial jurisdiction.
“So we need the participation and collaboration of those agencies to successfully prosecute people who are evading tax.”

 

IRC exceeds target by K375mil

February 21, 2022The NationalBusiness

THE Internal Revenue Commission collected K9.596 billion last year, exceeding the target by K375 million, commissioner general Sam Koim says.
Last year’s target was K9.221 billion.
Koim said during the launch of this year’s annual plan in Port Moresby on Friday that some of the contributions included:

  • SALARIES and Wages Taxes increased by K360 million in 2021, largely due to the switching off the unverified GST credit offsetting practices;
  • MINING and petroleum taxes increased by K421 million due to favourable increases in gas and mineral prices in 2021;
  •  GST increased by K120 million due to implementation of Section 65A;
  • DEBT swap contributed an extra K110 million; and,
  • PRESCRIBED Royalty Withholding Tax increased by K5 million in 2021 due to an administrative payment arrangement change.

“The projections were predicated on the assumptions of unconstrained economic conditions and increased compliance efforts,” Koim said.
“However, the persistence of Coronavirus (Covid-19) pandemic in 2021 posed a recurring challenge for IRC to meet this target.
“Most of our traditional methods and manual processes of tax administration have been seriously constrained by the pandemic. Generally, we observed a decline in employment and business activities, the closure of the Porgera mine also had an impact on tax revenue,” he said.

 

Commission targets K10.5billion in tax revenue this year

February 21, 2022The NationalBusiness

THE Internal Revenue Commission (IRC)’s gross tax revenue projection for this year is K10.509 billion, an increase of 16 per cent or K1.327 billion from last year, its commissioner general Sam Koim says.
“Our focus this year is on getting revenue to fund the national budget,” he said.
“IRC must be transformed into a robust, modern and efficient tax administration by 2025.”
Speaking at the launch of this year’s annual plan on Friday, Koim said: “We have committed the last few years to building the foundations.
“We have rallied several initiatives and our strategic intent remains unchanged for 2022.”
Some of the main initiatives for 2022 are:

  • DESIGN and implementation of the Goods and Services Tax Monitoring System, a system to enable IRC to collect GST (Goods and Services Tax) at the point of sale;
  • PROCUREMENT and installation of the Integrated Tax Administration System;
  • ROLLOUT of GST Section 65A to subnational governments and major contracting companies;
  • DESIGN and implementation of the Salaries and Wages Tax (SWT) collection at source;
  • QUICK response coding of all tax certificates;
  • IMPLEMENTATION of new organisational design and structure;
  • INDUSTRY coding and benchmarking;
  • BUILDING data analytics capability;
  • IMPROVE taxpayer identification process;
  • TAX crime investigation and prosecution; and
  • CONTINUATION of all other effective measures

“We are also investing in digital technology to move away from manual and laborious processes and adopt automation,” Koim said.
“The full operation of the ‘MyIRC’ Payment portal is a quantum leap in our digital transformation journey.
“The Government has allocated the IRC funds to procure and commence the implementation of its new Integrated Tax Administration System and funding support to progress the work on a new GST monitoring system.
“On the back of digital transformation, we would like to harness data from all sources and transform them into useful insights to leverage tax compliance and enhance timely decision making.
“With data analytics capability, we would like to work smarter,” he added.

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