The Commissioner-General of the Internal Revenue Commission (IRC), Betty Palaso, has announced a temporary tax amnesty in Papua New Guinea. Penalties that would normally be imposed by the IRC on late lodgement of annual tax returns and late payments will not be applied for the rest of 2017.

The Internal Revenue Commission’s Betty Palaso.

Palaso said it is an opportunity for all taxpayers to bring their tax affairs up to date, without the normally imposed penalties.

She said it is also an ‘exercise’ by the IRC to collect outstanding tax revenue for Government; some of which has been tied up for long periods due to disputes over penalties.

Ms Palaso said the amnesty would provide relief from penalties that would normally apply to the late lodgement of annual income tax returns and the late payment on taxes assessed.

It will also apply to penalties normally imposed on monthly withholding tax returns such as Goods and Services Tax, Salaries and Wages Tax, Corporate Income Tax, Personal Income Tax and other forms of withholding taxes.

Palaso ‘encouraged’ new and unregistered businesses to register their Tax Identification Number. She also called for ‘timely lodgement of returns and payment’.

‘KPMG advises businesses to ‘immediately review your own compliance with such lodgement and payment obligations.’

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The amnesty is part of the Government’s 100 day, 25-Point Plan, aimed in part at encouraging greater revenue collections for government.

Zero

According to Zanie Theron, Managing Partner Audit and Assurance Services, the IRC will also remit any Late Lodgement Penalties (LLPs) and Late Payment Penalties (LPPs) to zero ‘if the remaining base tax payable is paid in full during the amnesty period’ (for taxpayers who already have existing arrangements in place with the IRC for repayment of outstanding taxes).

She advises that businesses immediately review their own compliance with such lodgement and payment obligations, ‘to determine whether or not this Tax Amnesty might be of relevance to your circumstances.’

‘Re-assess your compliance plan for the upcoming 2018 income current year.’

‘Where such review indicates any lateness on either count, determine the degree of non-compliance and create an action plan to address this within the timeframe of the amnesty period,’ she writes.

‘It is important to note that some elements of compliance, such as the preparation and audit of financial statements, or month-end data are time consuming and the work required to achieve compliance should start now.

‘Once full compliance is restored, re-assess your compliance plan for the upcoming 2018 income year to ensure all future such obligations and deadlines.’

Tax collection remains a significant issue in Papua New Guinea.

Dairi Vele, Secretary of the Department of Treasury, has commented that ‘in any one year we can have 20,000 business registrations and then we only have 2000 applications for tax file numbers.’