PNG Customs Service is warning importers to comply with law when doing business in PNG, including paying tax, or face penalties that could reach up to 200 percent of the evaded tax and prosecution.
The increase in penalty fees and the move to prosecute non-compliant importers are due to amendments made to the Customs Act in 2020. This was made known during a press conference this week to announce the end of an investigation into an importer that attempted to avoid paying the due tax for goods imported into the country.
The importer was ordered to pay a penalty fine of more than K2 million and will face prosecution.
Customs Chief Commissioner, David Towe, said though harsh, the amendments are designed to ward off false declarations made by importers and ensure the government is not cheated out of the revenue that is due.
“When applying penalty fees, we use a bit of discretion. Penalties must not be less than 50 percent. For first time offenders, they are given a warning and the next time they do it again, they are slapped with a 50 percent penalty.
“For this particular importer, this is their third offence, so they have been given the 100 percent penalty.”
Assistant Commissioner, post clearance audit division, border security & regional operations, Wilson Tom, said over the past few years, PNG Customs Service has invested a lot in modernising all their business forces and said their facility at Motukea in Port Moresby is one of them.
“Our intervention programs are intelligence driven due to our manpower challenges so with the current increase in the customs penalties, we are using our modernised business process and our intelligence network to home in on any revenue leaks, illegal and illicit trades.
“This is a significant amount of revenue that would’ve been evaded if my team had not done their job and stopped this container. This detection is a significant major fraud on tax revenue due and payable to the government and the people of this country. Especially during these times when the economy is down and we need companies that are operating in our country to pay their taxes and do their business.”
Director for Compliance, Gamini Ora, also announced that Customs would be reviewing the Customs Tariff Act.
“We will be going out to the industry to carry out consultations on the review of the customs tariff act so issues that the industries are facing, we can accommodate and try to make the necessary changes to the act in preparation for the 2022 budget,” he said.
“We are here to work with you. Let us be partners in the customs business to protect our borders.
“If you want to do business in this country, imports and exports, passengers and conveyances, comply with the law and let’s partner and protect our community, protect our country, protect our people and protect our borders,” Ora added.