Debt-swap working well: Koim

By SHIRLEY MAULUDU
THE debt-swap arrangement between the Internal Revenue Commission and PNG Power Ltd (PPL) has resulted in the payment of about K200 million in taxes owed by PPL, says IRC commissioner-general Sam Koim.
Koim said the arrangement had worked well for the state-owned entity.
“The debt-swap was like a trial thing that was introduced for the taxes that we collect,” he said.
“It was around K105 milion of the base tax that we (initially) collected.
“So we have written off some debts as well around K200 million.
“That’s the base tax and the associated penalty that was written off.
“We have cleaned PNG Power’s books substantially.”
But, he said, PPL must continue doing the right thing.
“They are having a monopoly and running the business,” he said.
“If you are a Government and you want to run a business, you have got to be a business man.”
Koim told The National earlier the strategy was introduced for the taxpayers.
“If Government entities owe us money, then we do a trade-off using this arrangement,” he said.
“For this case, the Government settled its bill, and then PNG Power settled its bill, its outstanding tax payments, with the IRC.
“It is a good strategy to write off tax debts.”
On tax payments by state-owned entities, Koim said most of them were struggling.
“They have to clean up first but they also have current commitments,” he said. “We are putting some of them on payment plan consistent with their cash flow.
“But we are hoping that some of them will follow the path of PNG Power (using) the debt swap.
“We can clean their books and they can go to commercial banks and borrow and operate commercially.
“At the moment, it is eating into their cash flow and of the Government.”