THE Internal Revenue Commission (IRC) is currently auditing a number of mining companies in Papua New Guinea to ensure they comply with the country’s tax laws, says IRC Commissioner General, Sam Koim.
In a statement today (July 10), Mr Koim said the IRC has discovered a concerning pattern among Papua New Guinea’s leading mining companies.
He said a review from 2013 to 2023 revealed that none of the five major operational mines examined have paid any Dividend Withholding Tax (DWT) over the last 10 years.
Koim said despite a whopping increase of approximately 389% in mineral export receipts, from K9,071.2 million in 2013 to K44,216.6 million in 2022 as reported in Bank of Papua New Guinea’s Quarterly Economic Bulletin Reports, there has been no dividend paid to the shareholders of these mining companies.
The Commissioner said the DWT, mandated at 15% on dividends distributed to shareholders, serves as a crucial indicator of corporate profitability and investor returns.
Koim said: “Are these companies truly profitable? How can investors derive returns if dividends are non-existent? It defies logic that mines continue to operate while failing to compensate shareholders for their investments over the past decade. Or if they are paying their shareholders, how are they paying them, because it’s not paid as a dividend?”
“This discovery raises questions about the financial health and transparency of these mining companies,” Commissioner Koim said.
“The lack of DWT payments suggests that either the companies are not generating sufficient profits to distribute dividends, or they are finding ways to avoid this tax obligation, potentially depriving the government and shareholders of crucial revenue.”
Koim said IRC is auditing these companies to ensure they are operating within the bounds of Papua New Guinea’s tax laws.
