Investigate tax owed to IRC

Letters

AS an observer, I believe this K1.8 billion in unpaid taxes is the direct undertaking of the poor decisions made by the previous government.
The commitment to host the 2018 Asia Pacific Economic Cooperation (Apec) Summit, its expenditure, with the direct tapping into the revenue coffers of State owned Enterprises’ (SoE) and businesses prior to paying of its taxes has contributed to the K1.8 billion unpaid taxes to the IRC (Internal Revenue Commission).
This was revealed by the acting IRC commissioner-general Sam Koim in the media on Nov 20.
PNG is an underdeveloped nation in the global community.
Such government decisions to host world and regional events has prompted the previous government to get additional international aids, grants and loans from international financial institutions and other donor countries to facilitate its commitments.
In doing so, due to geopolitical influence within PNG’s economic and political sphere, bilateral donor countries in the South East Asia region lured PNG to hoist the 2018 APEC Summit suppressing PNG economically.
The benefits of hosting the 2018 APEC summit was predicted to come to full realisation through various memorandum of understanding and memorandum of agreement signed between member economies.
But the impact of hosting this summit has placed an immense burden on the country’s economy.
The previous government made an unwise decision to tap into the SoEs and businesses coffers as a remedy to balance the economic equilibrium of the state after getting vast loans. The previous government needed a way out of financial difficulties, hence, decided to tap into revenues of SoE’s and business coffers with their taxes before the collection by IRC.
Treasurer Ian Ling-Stuckey in his budget repair statement mentioned on Nov 17, that 13 government agencies and national departments collected personnel income tax from their employees but have not paid this to the IRC totalling to K203.5 million.
When adding both aggravated figures of K1.8 billion and K203.5 million, the grand total would be approximately K2.1 billion yet to be paid to IRC. I believe the amount highlighted by Ling-Stuckey and Koim has brought to light the corrupt practice used by the previous government. It is an illegal scenario for the public sector to withhold taxes to IRC.
I support the PNG Chamber of Commerce and Industry president John Leahy in stating in The National on Nov 25, that the non-remittance of salary or wages tax is the most heinous of all tax defaults.
He said: “When an employer pays a net amount of the employee’s pay and does not remit the tax deducted to the Inland Revenue Commission (IRC) is a (criminal) breach of trust, tantamount of stealing”.
It was a corrupt decision by the previous government to tap into the taxes of the state before payment to IRC.
It is a breach of administrative regulations.
This is an illegal scheme used by the previous government to run the affairs of the state.
Regardless of whether the motives was for the best interest of the state’s affairs, it is still illegal as prescribed in the Public Finance Management Act.
There are too many free riders in this country.
I agree with the visiting UK political economist professor Mick Moore in pointing out in the media on Nov 20 that “if low income farmers are going to pay any kind of direct tax, then they should be paying small amounts to their local councils”.
I support the concept of local councils getting tax within its ward because this will assist each ward to develop basic service delivery issues in his or her ward.
The local level government headed by each ward president should have the privilege to collect at least some form of tax from small medium enterprises, farmers and vendors in their wards.
If citizens are serious about developments and service delivery in their constituencies it would be more appropriate for people to at least pay some tax.
I think it is unfair for major business houses, the extractive sector and the public and private sector employees and their employers paying tax while many unregistered informal small scale entities are missing out on paying tax.
To address and recoup the economic equilibrium balance of the state from this outrageous decision of the previous government, the current government needs to work with Koim and his team, in not only investigating the issue but also seeking drastic and clear policies on how to get tax from informal sectors.
The IPA (Investment Promotion Authority) should do its part to register all businesses in PNG from small to medium scale businesses right throughout PNG.
In addition if citizens are serious about developments and service delivery everyone should pay some form of tax and not wait for government loans and grants to develop service delivery to constituencies.
I also agree with the published views shared by acting commissioner for taxation Pauline Bre and East Sepik Governor Allan Bird in The National on Monday to extend the small tax base that we have.
We need to improve GST (goods and services tax) and make everyone buy goods and services from registered businesses.
The Australian government came to rescue in assisting the current government for its 2020 National Budget.
The IRC needs clear policies on how to get tax from informal sectors that has been lacking over the years.
Therefore, it is imperative for this government to work closely with provincial and district level governments to put in place effective mechanisms in capturing every small scale businesses operating in constituencies to be registered under IPA and be taxed by IRC.
I believe when everybody pay taxes, the people take ownership of developments in communities and will be empowered.
Prominent damage has been done already.
I urge this government to investigate the withholding of taxes from IRC by the previous government.
The people of this country need answers for this action by their previous government in where their taxes went to.

Critical Observer,
Michael Trawanga, Jr