Post Courier | February 1, 2018
The Papua New Guinea Extractive Industries Transparency Initiative (PNGEITI) has welcomed the government’s decision to put on hold Tax Credit Scheme (TCS).
Prime Minster Peter O’Neill told business leaders some companies failed to execute TCS properly.
Mr O’Neill said the government decided to put a stop to it, because there is a transparency issue with the process.
Head of PNGEITI National Secretariat Lucas Alkan when concurring with the idea that the TCS is a best public private partnership (PPP), said the opaque nature of the scheme had to be addressed by reviewing the processes involved in awarding tax credit to companies.
Mr Alkan said successive EITI reports have found discrepancies in the reporting of the tax value foregone and it was timely that the government looks into it to take remedial actions.
“We welcome the decision of the Government to put on hold TCS projects as EITI reports affirm the observation that there is lack of transparency and accountability in this scheme.
“The process needs to be more transparent -particularly the guidelines and the criteria involved in the approval process.
The ITC expenditure should be included in the annual national budget books and the Department of National Planning and Monitoring (DNPM), should be able to show this information,” he said.
Mr Alkan said the PNGEITI Report for 2016 fiscal year published recently included the ITC as one of the recommendations for the government to increase transparency and accountability regarding the approval process by DNPM, expended on projects by companies and resulting tax payments offset by the IRC. “We trust the national government will address the opaque nature of this scheme so that original intent of TCS is maintained. “We applaud the Prime Minister for the insight and look forward to a review of the TCS,” he said.