OECD comes to PNG’s aid to chase tax dodgers

Internal Revenue Commission is now in partnership with an international auditing organisation to help tackle multinationals that are avoiding paying taxes, Deputy Prime Minister and Treasurer Charles Abel, pictured, says.

He said that Organisation for Economic Cooperation and Development (OECD), under its ‘tax inspectors without borders’ programme, would help IRC audit large companies, especially multinationals that operate in the forestry and fishing sectors.

Abel signed the partnership with OECD on Thursday in Port Moresby to tackle tax-base erosion and profit shifting by multinationals in Papua New Guinea.

OECD head of division Ben Dickinson said they were happy PNG invited them and would send their best auditors to help next year.
IRC Acting Commissioner-General Dr Alois Daton also attended the event at Treasury Building in Waigani.

“Some companies are sophisticated,” Abel said.

“They get cross-order flows and movement of goods and can use that sophistication to manipulate the tax burden and shift profits to minimise tax.

“Tax evasion is not only a problem to Papua New Guinea.

“It is a general issue worldwide that we need to address.

“We can’t say how prevalent tax evasion by multi companies is going on at this stage, but we do suspect that there are element of transfer-pricing and profit-shifting going on,” Abel said. “At this point in time, it is difficult to address this issue comprehensively.

“It is one of the initiatives of IRC to put a bit more attention and capacity to address this issue.

“Until then we can’t say for sure the level of it (tax evasion), but we have suspicions that it is happening in extractive and export industries.

“There are some weakness there.

“Some companies take advantage of our weakness.”

The OECD is a think tank or monitoring group with its goals include fostering economic development and cooperation; fighting poverty; and ensuring the environmental impact of growth and social development is always considered.

Over the years, it has dealt with a range of issues, including raising the standard of living in member countries, contributing to the expansion of world trade and promoting economic stability.

The OECD was established on Dec 14, 1960, by 18 European nations plus the United States and Canada.