Businesses yet to get tax refunds

THERE is a substantial amount of outstanding goods and services tax reimbursements to businesses, says PNG Business Council executive director Douveri Henao.
Henao said the mining and petroleum sector alone had not received tax refunds estimated to be around K1.3 billon. “These outstanding reimbursements go back three to five years,” Henao said.
When a business overpays tax, the Internal Revenue Commission was supposed to refund it.
“The IRC hasn’t been doing that and subsequently there has been a large accumulation of (tax refunds),” he said.
“Last year, there was a sensitive policy enacted by Treasury called controlled payments.
“It means that instead of paying, for example, salary and wages tax, they deducted (it) from the goods and services tax credit.
“So if I have a K100,000 GST reimbursement, and my salary and wage tax is K50,000, (they) deduct the K50,000 from the K100,000 owed.
“That was applied last year because of the cash flow challenges businesses faced. Unfortunately, the IRC commissioner has made the decision not to continue that amnesty.
“The only difficulty in that position is that businesses are yet to make substantial improvements in their revenue.”