Papua New Guinea Loggers Cost the Country - Time to Shut Them Down
11/18/00
OVERVIEW & COMMENTARY
The plunder of Papua New Guinea's rainforests continues unabated. The following article highlights the fact that very few taxes are generated due to systematic tax evasion. Given the facts that 1) the industrial log export industry pays essentially no taxes and provides minimal other economic benefits, 2) that ecosystems and their functions are declining causing widespread hardship, and 3) the diminished forests have less potential to support development and local needs in the future; the PNG log industry operates at a net loss for the country. After 15 years of efforts to reform the industry, it is time to acknowledge it is irredeemable. The current Papua New Guinea logging industry is bad for the country and must be halted and dismantled. In coming months, Forests.org will be pursuing a campaign to stop and ban industrial log export from Papua New Guinea and move towards community based, certified production. We hope you will join us in this exciting campaign. Expect to hear more soon.
g.b.
RELAYED TEXT STARTS HERE:
Logging industry bad tax evaders
Copyright, 1999, Post-Courier Online (Papua New Guinea)
November 10, 2000
THE Internal Revenue Commission should vigorously pursue logging companies that do not pay taxes, it has been recommended to the National Government.
Prime Minister Sir Mekere Morauta said yesterday that out of the 27 logging companies operating in Papua New Guinea, only 14 had paid corporate income tax.
"This is despite the fact that many of these companies have been operating for more than five years," the Bogan tax review committee said in its report.
"One company has been operating for more than eight years without posting a taxable income. The 14 tax paying companies paid a total of only K21.7 million throughout their corporate lives. On average, the logging companies pay only K143,000 in corporate income tax each year.''
The report said that these data posed the question why some logging companies had not reported profits for many years? And if so, why has the IRC not pursued these companies to see whether there has been any transfer pricing, using their powers under the Income Tax Act?
The committee recommended that logging companies should not pay the value added tax, and that the sale and export of unprocessed logs be treated in the same manner as any other product for the purposes of VAT, which would mean zero rated for VAT purposes when sold overseas.
The committee recommended that the excise tax on gaming machines be reduced from 150 per cent to 70 per cent.
It said the distribution of gross profits from gaming be amended so that 62 per cent be paid into consolidated revenue as opposed to the current 60 per cent, 6 per cent to the provincial trust account (currently same), 24 per cent paid to site owners as opposed to the current 22 per cent, 8 per cent to operators against the current 4 per cent.
The committee found that people who played poker machines paid about K105 million a year.