Pruaitch slams Abel’s call for ‘quiet meeting’ on tax

OPPOSITION leader Patrick Pruaitch says it was irresponsible for Treasurer Charles Abel to ask Kumul Petroleum and the Internal Revenue Commission (IRC) to meet quietly to resolve charges of tax evasion.
“This is a matter of great public interest. Tax evasion is a criminal offence. IRC’s inability to collect more than half a billion kina in declared 2014 and 2015 tax payments reflects poorly on the competence of the national government and IRC,” Pruaitch said in a statement.
He said accountability resulting from government participation in the extractive industry transparency initiative suggested that K3.5 billion to K4 billion in company tax should have been paid to IRC by partners in the PNG LNG project, including Kumul Petroleum, in 2014 and 2015. Instead, the IRC collected only K788 million.
Pruaitch said good economic management resulted not just from minimising corruption, waste and misallocation of resources, but also ensuring the correct amounts of taxes were collected from companies in the most profitable sectors.
“For many years the government has provided additional funding to the IRC to improve its tax collection efforts. There is little evidence that IRC has ensured greater compliance on the part of resource companies,” Pruaitch said.
He said if a similar exercise was done for 2014 using JX Nippon 4.7 per cent as a guide, IRC should have been able to collect around K2.6 billion in company tax rather than the K615.6 million it ended up collecting.
Instead, official records show the Government collected only company tax totalling K3.2billion in 2014 and K2.6 billion in 2015.
Deputy Prime Minister and Treasurer Charles Abel said the existing taxation structure was set by Pruaitch when he was in the government.