LOADING

Type to search

RECORD K9.7 BILLION TAX REVENUE FOR PNG

□IRC has been implementing reforms to improve the country's tax collection system to a modern one.

BUSINESS NEWS

RECORD K9.7 BILLION TAX REVENUE FOR PNG

Prime Minister, James Marape today announced a record K9.7 billion tax revenue collection by the Internal Revenue Commission (IRC).

The outstanding performance of the tax revenue collection has been attributed to high demand sparked off by restoration of normalcy during the post-Covid period and windfall in the petroluem and gas sector due to the Ukrainian-Russian war.


He made the announcement as he prepares to travel to London for the funeral service of Queen Elizabeth II and as Papua New Guinea prepares to celebrate its 47th Independence anniversary on Friday, September 16, 2022.

“I commend the sterling performance by the Internal Revenue Commission for the last eight months,” PM Marape said.

“Papua New Guinea could not have asked for a better 47th Independence Anniversary performance indicator of a key State energy working its heart out. This record collection is the highest ever since 1975, and most importantly, highest collection ever in a tough year.

“As of week ending September 9, 2022, the Internal Revenue Commission has collected around K9.7 billion with net transfers of K9.4 billion to the Waigani Public Accounts as projected by the 2022 National Budget.

“This is a record achievement in a fiscal year, where IRC was able to surpass its annual target in the space of only eight months.

“Compare the first eight months of this year with first eight months of last four years:

“IRC’s Tax Revenue Collections in 2022 was boosted by a windfall in the petroleum and gas sector directly related to the Russian-Ukraine conflict. The global supply constraint coupled with higher demand as a result of post-COVID normalcy has seen the price of oil nearly double in space of just 12 months. Total Mining and Petroleum Tax (MPT) collection in the first eight months of 2022 totalled K2.965 billion.

“Whilst windfall from MPT is acknowledged, other taxes have also performed strongly in 2022 – a reflection of some of the transformational interventions introduced at IRC since 2019.

“The average MPT collections for the past four years (2018-2021) was K379 million.

“The average total collection for first eight months of the last four years was K5.657 billion.

“2022 total collection for the first eight months, less the MPT windfall, is K7.163 billion.

“A total of K1.5 billion in increase revenue not attributed to MPT windfall has eventuated in the last eight months of 2022.

“Non MPT taxes have performed well above the average of the last four years. IRC is beginning to see the fruits of its revenue initiatives and will continue to strive on becoming a robust and efficient tax administration by 2025.”

PM Marape said some of the notable initiatives and their revenue gains were as follows:

• Introduced stringent Goods and Services Tax (GST) verification for refunds. This resulted in 20 per cent increase in GST collection annually or K200 million;

• Cessation of credit offsets of GST to pay Salary and Wages Tax (SWT) liability. This resulted in K30-K40 million plus /month or K500 million annually;

• GST s65 was rolled out. This resulted in K200 million-plus in the last eight months;

• Increased media presence and awareness via media, resulting in on time payment improvement;

• Increased support to provincial officers for tax inspections and awareness; and,

• The overall taxpayer awareness, improvement in efficiencies, increase in compliance activities and use of technology, amongst others, has contributed towards the sustained improved performance of IRC since 2019.

“The Marape Government is intentional in raising internal revenues; hence, this year the Government increased the budget of the Internal Revenue Commission,” the Prime Minister said said in a media statement.

“In 2022, the Government provided K160 million. This is the biggest budget support ever for IRC.

“I understand that IRC has initiated 32 major reform projects to transform IRC into a robust, modern and efficient tax administration by 2025. The Government will continue to support IRC in the next two years to ensure that those projects are implemented successfully.

“The Marape Government’s focus is on growing the economy, raising internal revenue and reducing borrowing over time.

“The Government has intentions to introduce the immediate tax reliefs to cushion the impact of inflation.

“The Government is also work toward the Golden Jubilee Anniversary in 2025 where most of the taxes, especially Salary and Wages Taxes and Corporate Income Taxes, will be reduced.

“IRC is currently undertaking all these projects to establish a cohesive collection mechanism so that any reduction in tax rates (tax revenue forgone) will have revenue positive effect. “

Tags:

You Might also Like

Leave a Comment

Your email address will not be published. Required fields are marked *