Tax diversion noted by IRC

The Internal Revenue Commission (IRC) has discovered a growing trend among identified public and private owned organisations diverting salary and wages tax to other operational expenses.

Acting Commissioner General, Sam Koim, said the practice is a breach of trust between the employer and employee, and is seen as theft and criminal in nature.

The monies, which they believe run in the hundreds of millions of kina, are then used to run other aspects of their operations.

“We have witnessed a growing pattern where employers withhold salary and wages taxes from the employees and instead of transferring those funds to IRC, divert the taxes to meet their other operational expenses. For some of you who have been complaining about paying taxes, your taxes may not have reached the IRC but the pockets of your employers,” said Koim.

Koim said the tactic is criminal in nature and IRC will come down hard on organisations.

Also liable will be directors, chief executive officers and managers who are found to be in the wrong.

“Not only is it an offence under the tax laws where precautionary penalties will be strictly applied, but it will be considered and pursued as a criminal matter for those employers, including their directors, CEOs and managers who fail to pay the IRC any single toea they collect and withhold on account of the employees.”

The former Task Force Sweep Chairman said they have picked up a number of cases and will start pursuing them.

Koim has urged anyone to report tax payment anomalies to the IRC if they witness deliberate evasive behaviour.

(Acting Commissioner General, Sam Koim)

Author: 
Cedric Patjole