THE Government through the National Executive Council (NEC), has awarded a landmark contract for the implementation of a Goods and Services Tax (GST) fiscal monitoring system to Virtual Flex Limited, in collaboration with the international firm, Data Tech International (DTI).
The contract, officially signed by the Governor General on Tuesday March 18, at the Government House, marks the beginning of this transformative initiative designed to modernize tax administration and enhance GST compliance nationwide.
The system, known as TaxCore produced by DTI, will be called Goods and Services Monitoring System (GMS) in PNG.
The GMS is an advanced digital solution designed to capture and monitor GST transactions in real-time, ensuring accurate tax reporting and reducing revenue losses due to tax evasion.
This initiative aligns with global best practices in fiscalization, leveraging advanced technology to close tax gaps and promote fairness in the tax system through e-receipting by electronically generating, transmitting and storing of sales receipts to the Tax office, from the point of transaction.
In simple terms, this is a system that will be embedded at the Point of Sales systems such as checkout cashiers as shops, etc.
The introduction of the GMS represents a critical step in addressing GST evasion and curbing fraudulent activities such as underreporting, false invoicing, and the use of illegal sales suppression software.
By implementing this system, PNG Internal Revenue Commission (IRC) aims to create a level playing field for businesses, ensuring that all businesses comply with their tax obligations.This project will significantly enhance the integrity of PNG’s tax system by improving revenue collection from GST.
By leveraging technology, the IRC can ensure that every kina of GST collected is properly accounted for and contributes towards national development.
The TaxCore system has been successfully deployed in numerous countries, including within the Pacific Island region, such as Fiji, Samoa, and most recently, Vanuatu.
The implementation of the GMS is a pivotal component of the IRC’s broader digital transformation strategy, aimed at building a modern, efficient, and robust tax administration.
The system will deliver several key benefits, which include:
Real-time Transaction Monitoring: Ensuring that all sales transactions are recorded and reported accurately to the tax authorities.
Enhanced Fraud Detection: Identifying discrepancies in GST reporting to minimize tax leakage.
Increased Voluntary Compliance: Encouraging businesses to comply with tax regulations through transparent monitoring.
Economic Fairness: Leveling the playing field for businesses that operate ethically.
Reduces the Cost of Compliance: Streamlines tax process, making it easier for businesses to comply with their tax obligations.
Improves Tax Administration (IRC) Efficiency: For instance, it simplifies the verification of invoices/receipts when claiming input tax during the GST refund process.IRC Commissioner General Sam Koim expressed his sincere gratitude to all competitive bidders who participated in the open and transparent tender process, commending their dedication and professionalism throughout.
He also acknowledged the Marape-Rosso Government for its commitment to modernizing tax administration by approving and funding this critical tax technology.
In addition to the GMS contract signing, the contract for the Integrated Tax Administration System (ITAS) was also signed.
As the core tax technology, ITAS is poised to revolutionize tax administration and significantly enhance the efficiency and effectiveness of the Internal Revenue Commission in administering tax.