The objective of the merger is to improve the level of compliance and GST collection amongst Government service providers and reduce the administrative burden on all National Government Agencies.
The merger was launched today in Port Moresby.
ISC Commissioner General, Sam Koim, said it is their intention to make GST the number one revenue earner in the country.
Part if the strategy to achieve this is to invoke Section 65A of the GST Act 2007.
Section 65A of the GST ACT allows the IRC to issue notices to a person or company with withhold GST charged by service providers, and have the GST remitted back to the IRC.
The IRC had conducted a trial implementation of Section 65A under a six month period and collected around K20 million in GST alone.
Merging Section 65A with the IFMS will ensure GST charged by service providers are withheld by the Finance Department and remitted to the IRC.
“This particular project launching today is a way forward and I believe that if we configure the 36 Departments and then to the Statutory Organizations and the Sub-National Entities I believe that we will close significantly the GST collection gap that we currently have,” said Koim.
The Department of Finance as the primary custodian of IFMS will facilitate this initiative going forward.
Finance Secretary, Dr. Ken Ngangan, said the Department was happy to facilitate the GST collection process for better revenue collection.
“Finance is not just about expenditure management but also its now increasingly more involved in revenue collections which IRC and Treasury are mandated to do,” said Secretary Ngangan.
Finance Minister, Sir John Pundari, said commended Commissioner General Koim and Secretary Ngangan for the initiative which will greatly assist the government, during an economic downturn.
“I am truly encouraged by the fact that the two departments led by Commissioner and team of IRC are harnessing technology in making life easier in so far as the collection of taxes are concerned.
“Invoking Section 65A of the GST Act, by harnessing technology, configuring it, aligning it with the IFMS, is the way to go,” said Pundari.
The merger of the Section 65A Notice with the IFMS will be conducted in three phases.
It starts with all Government Department, followed by Statutory Agencies and lastly Sub-National Entities.