By HELEN TARAWA
THE Internal Revenue Commission (IRC) has disclosed under-reporting of taxes worth K18 billion by 127 companies in 2016.
IRC acting Commissioner-General Dr Alois Daton revealed yesterday that underreporting was one of the discrepancies that was found in the initiatives undertaken to recover money.
Daton said of the 127 companies, 96 were large companies and 31 were small to medium enterprises.
Treasurer Sam Basil commended IRC for its efforts, saying that this was a good, promising plan that it had undertaken to recover a targetted K1bil this year.
“This is welcoming news but recovering those monies would be difficult,” he said.
“We will stand with IRC to ensure that their funds in the budget would be available to fund auditors and tax inspectors to front up to the companies and bring in the much-needed funds to contribute to the Waigani account.
“I commend IRC for turning their spotlight on that and the involvement of provincial governments, we would like to close the gap with engaging them.”
Daton said IRC still had 2017, 2018 and 2019 to go through to find out if there were also records of under-reporting of taxes.
“We have done some analysis around the information returns which are being lodged by tax payers and we have identified underreporting,” he said.
“Our team has worked on underreporting and the value of it is K18 billion which is only for 2016 records.”
Daton said between now and October, IRC would be talking to those taxpayers, matching the data they had and the taxpayers would be asked to come in to confirm it.
“If there is a mistake, we will make the adjustments which will be made by October and in November-December we are going to bring that K1b additional revenue.
“There will be penalties once we have done all the adjustments and everything, penalties for underreporting.
“The message that we are going to deliver to the taxpayers is that they must be making full and honest disclosure and be honest in their dealings with IRC.
“Monies collected from underreporting will give us about K1bil but that’s just a conservative figure from about K5 billion that we can collect from this exercise,” he said.
“From this K18 billion, we hope to raise about K1billion towards the end of the year.
“And this K1billion is additional to K8.6b that IRC has been tasked to raise this year for the 2019 budget.”
Daton said the second initiative was to look at IRC’s K5bil debt recovery.
“We hope that by talking to taxpayers and talking to tax agents, we will look at working with taxpayers, ensure that if they to pay their base tax we will forgive their penalties,” he said.
“We are going to take to tax agents and stakeholders as well to find out whether they come up with suggestions, forgiving penalties, collect base tax so we can reduce the debt of K5 billion we are carrying.
“We will call a tax agency liaison group meeting where both the Treasurer and vice-treasurers will be present.
“We want to stress home the fact that tax agents and their clients must be honest in their dealing and pay their right amount of tax so that Government does not lose out on any money.”
By HELEN TARAWA