PNG’s Treasury has entered into an agreement with the Organisation of Economic Cooperation and Development to see this through.
The Government has invited the Organisation of Economic Cooperation and Development (OECD) to assist them with some auditors to look at cross border transactions.
Deputy Prime Minister and Treasurer, Charles Abel, said these international taxation experts will also help the Internal Revenue Commission better manage the issue of multinational companies’ transactions.
“The OECD have sent these two very qualified gentlemen to begin the process of working with the IRC on broader capacity building in this area through our Large Taxpayer’s Office,” said Abel.
“Can you remember that we launched Large Taxpayer’s Office not so long ago to give special interface interaction with the larger corporations?
“And as part of that initiative, these people are working with that part of the IRC to build general capacity but also, they’ll be working on some specific audit matters in relation to certain sectors that I won’t mention here.
“Suffice to say that we’re concerned about some of these transactions, particularly relating to transfer pricing and profit shifting. And minimising of tax that is due to Papua New Guinea and our people.”
Under the Medium Term Strategy, Abel says a whole range of reforms have been initiated, where the International Monetary Fund was asked to help as well.
“And we even got an IMF expert now based at IRC,” he said. “And we’re doing a whole range of reforms in the tax system, and it is starting to show some results.”
The two industry and international taxation experts have been assisting the IRC this week in the implementation of international tax standards and best practices. Their aim is to build strong technical expertise with the objective of launching transfer pricing audits to taxpayers in several industry sectors.
Treasurer Abel says they will be focusing more on export type industries.
“And we want to make sure that in their dealings they are not under declaring sales and under paying tax to our Government.”
(Deputy Prime Minister and Treasurer, Charles Abel)