ExperTax Advisory

Internal Revenue Commission (IRC) is set to modernize its tax administration with the introduction of the Integrated Tax Administration System (ITAS). The contract for this long-awaited transformation was officially signed yesterday by the Governor General at Government House, following approval from the National Executive Council (NEC) after a rigorous procurement process administered by the National Procurement Authority.

To read more, click the link: https://irc.gov.pg/news/media-releases/IRC-set-to-Launch-Modern-Integrated-Tax-Administration-System

PUBLIC NOTICE:

Important Update to Goods and Services Tax (GST) Return Lodgement Requirements

The Internal Revenue Commission (IRC) hereby informs all taxpayers nationwide of a significant amendment to the Goods and Services Tax Act (GST). Effective immediately, taxpayers with a total taxable income of K1,500,000.00 or less in the preceding twelve (12) months may now be required to lodge GST returns quarterly instead of monthly.

This revision aims to simplify compliance obligations and enhance operational efficiency for smaller businesses.

TAKE NOTE: Affected taxpayers will receive direct notification from the IRC regarding their eligibility for quarterly filing through a phased approach.

Key Benefits of Quarterly Filing:

1. Reduced Administrative Burden: Taxpayers will submit returns four times annually instead of twelve, significantly lowering administrative workload for both taxpayers and IRC.

2. Time and Cost Savings: Fewer filings mean less time spent on compliance activities and potential reductions in costs for professional services or in-house administration.

Revised Quarterly Lodgment Deadlines:

· 1st Quarter: 21st April (January – March)

· 2nd Quarter: 21st July (April – June)

· 3rd Quarter: 21st October (July – September)

· 4th Quarter: 21st January (October – December)

Taxpayers are urged to plan accordingly to meet these deadlines and avoid penalties for late submission.

Finally, it is registered. ExperTax Advisory.
Your go to tax expert.

Done a presentation on the "Taxation of Individuals - Salary or wages income" yesterday at PNG FM. It was a first external presentation and was a good experience. Looking forward to doing more of a similar presentation in future. Thank you to the team at SKT Accountants as well as PNG FM.

It's new year, tax returns due at the end of the second month (February). If you are looking for someone to prepare and file your returns, you can reach out to ExperTax Advisory for assistance.

What is Goods and Services Tax?

Goods and Services Tax (GST)

The GST Act 2003 introduced goods and services tax in Papua New Guinea (PNG). The internal Revenue Commission is the GST authority in PNG.

Goods and Services Tax (GST) is a tax that applies to the supply of goods (imports and domestic) and services in PNG. There are some exemptions on the supply of certain goods and services. GST is levied on the gross value of the supply with a credit allowed for the GST paid on inputs used to make the supply. The practical impact of this is that GST is collected at each stage of economic contribution made by anyone in connection with any activity of a business or commercial nature. The tax burden of GST is passed on to the consumer of the goods or services and therefore, as a general proposition GST is not a cost to business.

In recent days, GST has been a daily topic among ordinary citizens of PNG as they feel the pinch of paying increased prices (inflation) for goods and services. When the prices of goods and services increase (which includes GST), purchasing power decreases. This means the higher the prices, the fewer items you can purchase. For instance, in the past, with K50 you could buy 2 bags of 10kg Roots rice for K20 each. However, today with K50, you can only afford to buy one 10kg bag of Roots rice for K48.

To ease the ever-increasing cost burden shouldered by consumers, the PNG government, in its 2025 budget passed recently in parliament, has imposed zero rating on certain basic food items. This means that GST will be reduced from 10% to zero percent (0%) on the gross value of those basic food items. These items include baby diapers, soap, biscuits, cooking oil, flour, chicken, noodles, rice, sanitary pads and tampons, tea, coffee, tinned fish, and tinned meat. This will be effective from 1 June 2025 to 30 June 2026. Basically, the zero rating of basic food items is a GST cost benefit to consumers.

Send a message to learn more

Balancing Tax Burden and Revenue Growth: The IRC's Pragmatic Approach

Papua New Guinea's tax system has long been a challenge, with a heavy burden on taxpayers and concerns about the ability to maintain revenue.

IRC understands the challenges faced by taxpayers and has been taking strategic measures to improve tax administration to boost tax revenue without increasing tax rates.

As such, IRC Commissioner of Tax, Mr. Samuel Loi participated in the recent MINDS-MEET Forum Panel Discussion held on July 5th, 2024, in Port Moresby. The event focused on reforming PNG's tax regime to alleviate the tax burden without compromising revenue.

Mr. Loi was part of a distinguished panel including Deloitte Managing Partner - Mr. Herbert Maguma, Senior Research Fellow & Program Leader - Dr. Francis Odhuno, and Principal SBC Solutions - Naime T. O'ome.

The key topics covered during the panel discussion included:

-Existing Taxation Policies and their implementation with a view to creating more space to regulate the informal sector
-How the Government can reduce Salaries and Wages Tax without affecting overall tax revenue
-Existing Tax Bases and possible opportunities to increase these Tax Bases
-Current Tax Holiday regime and their implication on the
overall Tax Revenue

The panel, comprising professionals and academics, offered views on potential policy options for reforming Papua New Guinea's tax regime based on global best practices and theoretical approaches.

Mr. Samuel Loi however, highlighted that while the IRC does take onboard the policy interventions discussed, the commission also considers the practical approach currently undertaken that has seen substantial tax revenue growth over the last 3 years under the leadership of Commissioner General Sam Koim. This has been achieved through effective collection and improving source collection mechanisms.

In his presentation, Mr. Loi covered the IRC's 7 strategic pillars and main priorities, including the revenue trend over the last 20 years. This data demonstrates that revenues have grown significantly without any major tax rate increases.

Mr. Loi stated that the IRC expects revenue growth to continue in the near future and medium term. However, this growth will not come from raising tax rates.

Instead, the focus will be on leveraging the IRC's strategic administrative interventions to enhance tax collection and compliance efforts. This pragmatic approach aims to generate more revenue by optimizing the collection of existing taxes, rather than increasing the tax burden on citizens and businesses

Photo credit: PNG Christian Professionals Network

CHIMBU PROVINCIAL GOVERNMENT PRESENTS K6.7 MILLION CHEQUE PAYMENTS TO IRC

On July 9, 2024, the Chimbu Provincial Government (CPG) led by Governor Hon Noah Kool and Provincial Administrator Mr John Punde, along with Senior Officials, showcased their dedication to tax compliance. They presented cheque payments totalling K6.7 million to the Commissioner General of the Internal Revenue Commission (IRC), Mr. Sam Koim, at the IRC Revenue Haus Office in Downtown Port Moresby. These payments were attributed to GST Section 65A deductions or withholdings covering tax periods from March 2023 to June 2024.

The Senior Officials from the Chimbu Provincial Government commended Mr Koim for his leadership and strategic vision in introducing the GST S65A initiatives, which had led to increased collections and transformative changes within the Internal Revenue Commission.

The Chimbu Provincial Administration, in conjunction with the District Development Authorities (DDAs) in Chimbu Province, adhered diligently to the GST Section 65A directive issued by the IRC, thereby fully remitting the GST S65A payments. The improved GST S65A collections from Chimbu had boosted internal revenue for the province as 60% of the total GST collected from the province is remitted back to the province. Since the implementation of the Section 65A directive, Chimbu province had doubled its internal revenues.

During the meeting, CPG Officials emphasized the necessity for awareness and tailored training on GST Section 65A and taxation in general within Chimbu Province. The IRC team committed to collaborating with the CPG and DDAs to conduct the requested training session and make necessary preparations. The team also raised concerns about taxpayers conducting business operations in Chimbu while their business headquarters are located in another Tax Centre, leading them to lodge and pay taxes at their headquarters.

The Commissioner General assured the team that through a taxpayer mapping exercise and data cleansing by the IRC Data Team, it was discovered that Chimbu has 67 mapped taxpayers, with 43 being active filers and 24 inactive. The CG pledged to collaborate with the Chimbu Provincial Administration through the IRC Kundiawa branch to reactivate the 24 inactive taxpayers.

Despite challenges, the Chimbu Provincial Government, under the leadership of Governor Mr. Kool and Provincial Administrator Mr. Punde, displayed outstanding teamwork by closely collaborating with DDAs to effectively implement the GST Section 65A directive. Their joint efforts underscore the importance of inter-agency cooperation in promoting tax compliance and revenue generation for community development.

The introduction of GST Section 65A at the subnational level is designed to address significant tax compliance gap amongst Government contractors. Entities that received the lawful directive are urged to comply and help IRC collect taxes. “Government entities must not only become big mouths to be fed (spending agencies) only, but also help in making the money through mechanisms like this.” Mr Koim added.

This significant action by the Chimbu Provincial Government showcases its commitment to upholding tax regulations and contributing to the province and the nation's overall development.

Authorised for release

Mr. Sam Koim, OBE
Commissioner General
Internal Revenue Commission

Notice.

I have now resumed the business registration services, which include the following:

1. Business Name Registration
2. Company Registration or incoporation
3. Registration of an Association
4. Registration of other entities, like business groups, etc...

So, if you need my services, please let me know in the comment section, or you can inbox me.

Hi everyone!
I've been in hibernation for quite a while. So, now I'm back.