IRC gets help from international auditors

The National Business

International auditors have been deployed to assist Internal Revenue Commission (IRC) to manage the issue of dealing with cross-border transactions.
Acting chief commissioner Dr Alois Daton told the media in Port Moresby on Friday that Tax Inspectors Without Borders was an initiative that allowed industry
experts and international tax experts to be deployed to the country.
“We brought in two experts (last week), one in the industry and one in international tax,” he said.
“They are working with the team of auditors that we have set up in the large tax payers’ office.”
Daton said the IRC had created a dedicated specialist audit team composed of seven officials with experience in international taxation matters.
He said they have started to work alongside the international experts to:

  • Develop stronger risk assessment tools which would allow for identification of taxpayers who may then be subjected to audit;
  • enforce information-gathering powers to identify and penalise taxpayers not disclosing required information;
  • build sound audit cases addressing technical and legal aspects; and,
  • Review existing legislative tax framework to propose amendments to tackle tax avoidance and tax evasion by multinational companies.”

Daton said the target group was taxpayers in all industries which had international dealings that saw a lot of transfer pricing happening, and companies with international associates.
Deputy Prime Minister and Treasurer Charles Abel said bringing in international tax experts was based on an agreement between the Government and the Organisation of Economic Cooperation and Development (OECD) last October, to gear up efforts to tackle tax base erosion and profit-shifting by multinational enterprises in the country through its participation in the Tax Inspectors Without Borders initiative.
He said industry and international taxation experts would be visiting the country in coming months to continue delivering this programme of assistance which would have an initial duration of two years.
“This is to assist IRC in the implementation of international tax standards and best practices to build strong technical expertise, with the objective of launching transfer-pricing audits to taxpayers in several industry sectors,” Abel said.
“This effort will ensure taxpayers pay their fair share of tax with respect to their international transactions, increasing fairness in PNG’s tax system and promoting voluntary tax compliance.”