Report upsets PNG foresters
Post-Courier (PNG), Copyright 2000
November 13, 200
THE Forest Industries Association has expressed disappointment with the reported recommendation of the Taxation Review Commission as presented to the Prime Minister last Thursday.
Executive officer of FIA Robert Tate said: “It is entirely possible that the Prime Minister, Parliament and the public are being misinformed as to the real position of the forest industry and its ability to any longer be any significance to the economic development of the country”.
He referred to the reported non-payment of corporate tax by industry participants and said that submissions by industry, which questioned the accuracy of IRC records of payments, which may not be complete or correct, had been ignored. The review report said that only K21.7 million had been paid by companies throughout their corporate lives.
The FIA, Mr Tate said, held evidence that in the case of only one corporate group, showed a total of K29.8 million in tax paid. The same group had paid more than K2.1 million in salary and wages tax in 1998 while the Tax Office figure recorded only K1.7 million.
In another example he quoted one company as having paid K450,000 in wages tax in 1998 while the IRC records show it as nil.
In presentations to the review committee the FIA had presented these figures, and many other examples of incomplete data, however the commission seemed unprepared to review the IRC records or to reveal the basis of its findings.
“The lack of transparency and open dialogue in the review process was extremely disappointing” Mr Tate said.
“It seemed as if the conclusions had already been decided before the review began. It is of utmost concern that the review’s recommendations appear to be based on incomplete and inaccurate data.
“Evidence of the significant decline in output of the forest sector, the lack of any new or replacement investment in existing forestry projects, and the total absence of any new projects since 1999 under the FMA process, was all discounted under the review.
“The recommendation to yet again increase export tax rates while ignoring the crippling effect the collapse of the kina has on industrial output, can only indicate that economic development and employment creation in the forest industries are not a consideration.”
Mr Tate concluded by saying that “FIA member companies remain willing to engage in meaningful dialogue with Government in order to progress the many developmental issues involved in the forest sector”.
The recommendation that all matters of importance to the sector be determined by further studies to be done by the World Bank, contributed nothing to investor confidence nor to overcoming “our reputation” as the least viable investment destination in the region.