Mining company charged for income tax evasion

The Internal Revenue Commission [IRC] has slapped a mining company with a K11. 79 million tax assessment fine for engaging in a tax avoidance scheme.

IRC Commissioner General Sam Koim did not name the company in accordance with Section 9 of the Income Tax Act, due to ongoing appeal rights.

Mr Koim highlighted several incidences of visa violations and tax evasion.

“We are aware that foreign workers come on a work visa of one company but then end up working for multiple companies. We know that foreign workers are paid through their overseas/home bank accounts but are paid a lousy living allowance here in Papua New Guinea to avoid taxes. To facilitate that, they sometimes sign two contracts.”

IRC is now working together with the Immigration and Citizenship Authority to take action against those found to have breached immigration and tax laws.

“Our investigations revealed alarming discrepancies, including foreign workers entering on business visas to work in inline positions within companies, thereby avoiding paying the appropriate taxes due to the PNG Government. We have uncovered significant mismatches between the number of foreign workers holding work visas and the group employee declarations submitted to the IRC,” Mr Koim said.

To address these work visa-related tax evasion challenges, the IRC launched a project codenamed “Project Masta” to ascertain whether foreign workers and their employers comply with the tax laws.