IRC, Gulf ink deal to improve tax collection

By CLARISSA MOI
THE Internal Revenue Commission (IRC) will work closer to where business activities are happening so that taxes can be collected accordingly, commissioner-general Sam Koim says.
He said this during the signing of a memorandum of understanding (MoU) between IRC and the Gulf administration in Port Moresby on Friday.
The MoU was revised from the previous one signed in 2018 and was intended to establish a partnership between IRC and the Gulf administration for collaborative efforts to improve compliance and revenue collection to which 60 per cent in terms of goods and services tax (GST) would go back to support the province to provide tangible services for the people.
“In light of recent times and the new resource projects that are coming up in Gulf, especially the Papua LNG, Pasca and Mayur resource projects, business activities will be picking up,” Koim said.
“And as a tax office, we would work closer to where the business activities are happening so we can collect the taxes accordingly as well.
“That’s the reason why this (MoU) has been brought forward.
“In terms of GST distributions, apart from the few business activities that are there (in Gulf), we are doing direct transfers.
“The little GST portion (of) 60 per cent that we transfer to them.
“National Capital District is also obligated, under the law (GST Distribution Act 2003), to give a share of what they collect.
“Because most of the people from Gulf also do their businesses in Port Moresby as well.”
Gulf Governor Chris Haiveta said the MoU would allow tax officers from IRC to operate and assist the province in revenue generation, tax collection as well as monitoring economic activities that were going on.
Haiveta noted that in 2017, the province had about K900,000 in GST, however, through compliance work and cooperation from the IRC, the province now has about K4.26 million.
“We are on a verge of a boom in the province,” he said.
“We got natural resource projects that are now to be started, given the fiscal stability agreement for the Papua LNG project being signed about two weeks ago with the state, Total and joint venture partners.
“And I want to thank IRC for ensuring that the fiscal stability and tax implications are properly covered in that agreement.
“We will provide office space, housing, security and it is up to us now to get this relationship going on a very firm footing.”