Illicit trade results in loss of tax revenue

Business

ILLICIT trade results is a loss of tax revenue to the Government, according to PNG Manufacturers Council chief executive officer Chey Scovell.
This needs to be addressed through a joint cooperation between businesses and the Government, he said.
He told The National that there had been a progressive rise in illicit trade in PNG and that action had to be taken to protect legal businesses and collect more revenue for the Government.
“There’s plenty of evidence, talk and acknowledgement, of the growing number of businesses that are not operating in compliance with our laws,” Scovell said.
“Given the very large profits in illicit trade in excise goods, these illicit traders have lots of kina to throw around to protect their business interests.
“We know they are taking a strong root in Papua New Guinea.
“If we (business and government) don’t rip them out of the ground, so to speak, while they are still saplings, they will be impossible to manage once they take a stronger hold. “It is our proposal that the best means to collect the revenues forecast, indeed collect even more, is to have a cooperative effort on addressing the thousands of non-compliant businesses in Papua New Guinea.
“Our Investment Promotion Authority registers over 50 thousand companies per annum, yet the IRC (Internal Revenue Commission) has less than 5000 on its books.
“If we take a five-year window, that’s 250,000 businesses – and still less than 5000 making a contribution.
“This won’t be fixed with K14 million to the IRC or a few million given to a Treasury/ IRC taskforce.
“Any tangible action will only come from a joint effort with compliant industries and better reforms (reach and punishments) on corruption.
“Much could be done in three to six months.
“We know there is over a billion kina a year not making its rightful way to our public purse.

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