State owes businesses K2bil

By DALE LUMA
BUSINESSES are owed K2 billion by the State in goods and services tax (GST) refunds, says PNG Business Council executive director Douveri Henao.
Henao told The National that the largest amount was owed to the extractive industry.
“We are advocating offsetting this on current tax liabilities in SWT (salary and wages tax) income tax and others,” he said.
“This is a consistent finding in our quarterly market conditions survey.
“The IRC (Internal Revenue Commission) is not in support of GST offsets.”
Port Moresby Chamber of Commerce and Industry president Rio Fiocco also told The National that the Government had slowed down in paying GST refunds which were long overdue.
“The IRC is unable to say when they will be in a position to pay GST refunds,” Fiocco said.
IRC commissioner-general Sam Koim previously told The National that the GST refund arrears had been a problem for the commission.
He said a significant amount of revenue had been lost before 2019 due to unverified GST credits used to offset the salary and wages tax.
“Taxpayers would inflate their GST credits and knowing that the IRC does not verify those credits, they would then conveniently request for those unverified credits to be traded with other tax debts,” he said. “Revenue was lost through unverified GST credits being used to offset against salaries and wages taxes.
“When I switched this practice off, it resulted in us collecting K30 million extra every month.
“This contributed to the K300 million extra we collected last year.
“I do not have any appetite to go back to the time when taxpayers had a field day.”