Extractive sector welcomes PM’s decision to stop credit scheme

THE PNG Extractive Industries Transparency Initiative has welcomed the Government’s decision to put on hold the Tax Credit Scheme.
Prime Minster Peter O’Neill told business leaders last week that some companies had failed to execute it “properly”.
He said the government decided to suspend it “because there is no transparency in that process”.
Head of PNGEITI National Secretariat Lucas Alkan said the scheme was the best example of a good public-private partnership and suggested its review.
Alkan said successive EITI reports had found discrepancies in the reporting of the tax value foregone and the Government needed to take remedial action.
“We welcome the decision of the Government to put on hold TCS projects as Extractive Industries Transparency Initiative reports affirm the observation that there is lack of transparency and accountability in this scheme,” he said.
“The process needs to be more transparent – particularly the guidelines and the criteria involved in the approval process.
“The ITC expenditure should be included in the annual national Budget books and the Department of National Planning should be able to show this information.
“The PNGEITI Report for 2016 included the ITC as one of the recommendations for the government to increase transparency and accountability regarding the approval process by DNPM, funds expended on projects by companies and resulting tax payments offset by the IRC.
“We trust that the government will address the opaque nature of this scheme so that the original intent of TCS is maintained.”