Concerns over accurate data on GST: PwC

IT is difficult to determine whether the Internal Revenue Commission (IRC) and Treasury have accurate data on the level of Goods and Services Tax (GST) refunds that are outstanding, says an economist.
PricewaterhouseCoopers partner Peter Burnie said in the past years, GST had been an important part of Treasury and IRC’s plan to increase tax collections.
He was speaking at the business budget breakfast in Port Moresby yesterday,
“For Budget 2023, GST was not really singled out in the same way, rather the big increase in collections from 2022 and expected increase in 2023 is from mining and petroleum tax,” Burnie said.
“However, GST still represents a significant part of the tax take and is expected to grow next year,” he added.
“The question that is perhaps not clear in the budget papers is how the GST collections are estimated, and whether the numbers being used take into account the amounts of GST refunds that are currently unprocessed within the economy,” Burnie said.
“For example, exporters will always be in a GST refund position. With the current GST administration procedures for GST refunds being implemented by the IRC, the procedures are taking a long time,” he added. “In some cases, exporters have been waiting for up to two years for refunds to be verified.
“The volume of refunds being processed also does not appear to be keeping up with the amounts that are owing.
“With the IRC’s current processes, the GST refund balances may not even be recognised in their system for months.
“Therefore, it is difficult to know whether IRC and Treasury have an accurate picture of the outstanding GST refund.”