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 this week some companies failed to execute it (TCS) “properly”.
Mr. O’Neil said the government decided to halt it “because there is no transparency in that process”.
Head of PNGEITI National Secretariat Mr. 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 look 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” Mr. Alkan said.
“The process needs to be more transparent -particularly the guidelines and the criteria involved in the approval process. And that the ITC expenditure should be included in the annual national budget books and the Department of National Planning (DNPM) should be able to show this information” 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, funds expended on projects by companies and resulting tax payments offset by the IRC.
“We trust that the 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” Mr Alkan said.