IRC: Companies withholding taxes amounting to millions

By LUKE KAMA
SOME public and private companies are illegally withholding taxes deducted from wages and salaries amounting to “hundreds of millions of kina”, according to the Internal Revenue Commission.
Acting Commissioner-General Sam Koim could not put an exact figure to it but said it was an illegal act.
“This is an offence under the tax law where pecuniary penalties will strictly be applied,” he said. Koim said such taxes deducted by companies from salaries and wages should be remitted to the commission.
“Many employees of government organisations, State-Owned Enterprises and private corporations have been complaining that they are paying more taxes under our progressive personal income tax regime,” he said.
“But we have witnessed a growing pattern where employers are withholding salary and wages tax from employees and instead of transferring to IRC, the taxes are diverted to meet operational expenses.
“This pattern of withholding wages and salary tax is not only an offence under the law but it can also be (treated) as a criminal matter for employers – directors, chief executive officers and managers – who fail to pay the IRC (money) they collect and withhold .”
He could not give details of the amount of tax withheld or the organisations involved because “some of these information are protected under the secrecy laws”.
“But there are employers both in the public and private sectors and the amount goes up into hundreds of millions of kina,” he said.
“We have already picked up a number of cases under this category and I will be establishing a team to start pursuing these cases so I am sounding this alarm now.”
Koim urged employees who want to report anonymously on what their employer was doing to do so on http://[email protected].