Tax compliance woes

By DALE LUMA
THE compliance short fall in taxes of the country is about K2.5 billion, according to Treasury Minister Ian Ling-Stuckey.
This was announced during his presentation of the 2020 National Budget and outlook yesterday at the 2019 PNG Mining and Petroleum Conference in Port Moresby.
“Some good companies are paying their taxes but many others are not,” he said.
“Our initial research has shown that the opportunity loss per annum is huge and mind bobbling.
“The compliance short fall is a big number between K2 billion to K2.5 billion in the last five years.”
Ling-Stuckey said wages for state institutions which should have seen an increase in compliance in terms of tax but that had not happened.
“Look at IRC (Internal Revenue Commission), they are critical on compliance and revenue for our country, their wages have been increased in the last five years.
“This is by about three and a half times from K10 million to about K45 million and so during that five-year period, when the staff number has increased, you would have expected compliance to increase, it didn’t.
“Compliance in this case, we base our numbers on company income tax, personal income tax and GST (goods and services tax) alone and compliance has actually gone backwards.”
He said the estimated loss of K2.5 billion was based on the GDP (gross domestic product) within the last five years which was averaging around seven per cent.
“If it’s true that all this money should have been collected and wasn’t collected, then it has to be out there somewhere and that’s the challenge that is facing us at this time,” he said.
“A big focus for the government now is revenue and our first task at Treasury is compliance.”