By CLIFFORD FAIPARIK
INTERNAL Revenue Commission (IRC) contributes 80 percent to the total Government revenues from taxes collection alone, IRC Commissioner General Sam Koim says.
“It’s IRC‘s efforts, however, our State Own Enterprises (SOEs) after all are still struggling to pay dividends to the National Government.
“Some of them are on live support and when that is happening, it is the tax money that is basically funding the National Budget,” Mr. Koim said.
He said in 2020 during COVID-19, IRC contributed K8.2 billion and that has never been done in previous years.
“In 2021 while still battling with COVID-19, we collected K9.6 billion and in 2022, we collected K15.5 Billion.
“So there is a progressive increase in a way we collected and there is more room to improve in some of the formulas and interventions that we are introducing.”
Mr. Koim said they have identified leakages in the tax collection mechanism and improve the collection of taxes.
“We have put measures and tax evasion continues to be a biggest challenge.
“The other leakage is tax incentives, like tax holidays that are given to developers coming into the country. Tax credit scheme with unmonitored projects can also run into millions of kina in loss of tax collections.
“We had some research and development funding that were allowed to people to claim 150% in credit. So, billions of kina worth of claims on research and development was given to IRC.
“However, we have never seen new products been developed in this country equivalent to the amounts of billions of kina that were claimed to IRC.”
“So those are some of the leakages we have identified to reduce from 150% to 50%. And companies have been carrying loses for years and years for as long as they want to and we have reduce it down to 70% and no more.
“We are doing mapping in the National Capital District and identified people who have not paid taxes. So that’s one of the thing that we have done so far as we have a lot of low productivity.”
Mr Koim also stated that they have clamped down on Government Contractors evading Goods and Services Tax (GST).
“Government contractors get contracts from the government charge the government fee on the GST and after the month that they are supposed to pay fee.
“More often they don’t pay. They get paid their component; they don’t pay GST and walk away. So it’s been a challenge,” Koim expressed.
“What we have done now is we have embedded the GST collection in the Government Integrated Finance Management System (IFMS) and effectively collect what belongs to Caesar goes.
“So, last year we produce K285 million on that product alone for the last eight months because the first four months technical problems with IFMS affected our collection.”
Commissioner Koim was speaking said during the Media Press club in Port Moresby last Thursday.
