Opposition raises concern on tax liability on Porgera

A tax liability is a tax liability and no committee in the world can do a thing about it.

Leader of the Opposition, Hon. Joseph Lelang, made this comment in response to the National Executive Council (NEC) appointment of a panel of three independent experts to review a tax dispute between the Internal Revenue Commission (IRC) and Barrick Niugini Ltd (BNL).

Lelang said if there was a dispute between the IRC and Barrick, there are appropriate forums under the law for dispute resolutions.

This new panel of experts, he said is a waste of resources and time and has no legal standing at all to resolve any dispute.

“This matter was stark clear from the time of the signing of the Framework Agreement in April 2021 that Barrick was trying to avoid paying its tax liability that is legally due to the country.

“Other legacy issues under different heads of agreements now constitute a major tribunal that landowners are taking up with Barrick Niugini and that will be revealed in due course.”

With regards to taxation liabilities, Clause 4 of the Framework Agreement, under the Header ‘TAX MATTERS’ states the matter explicitly: ‘4. TAX MATTERS The resolution of all disputes and other matters relating to taxes that relate to arrears for Old Porgera and are payable by Barrick Niugini and any of the Concerned Affiliate, up to Effective Date is an essential condition for Barrick Niugini to initiate the commencement of mining operations for New Porgera.

The Project Company should not be responsible for the repayment of any amount agreed as part of any settlement reached between Barrick Niugini and the Commissioner General of Internal Revenue pursuant to Clause 4 (a).

In the event that the State, the Commissioner General of Internal Revenue or any other agency of the State takes any steps (whether directly or indirectly) to recover or otherwise enforce any tax liability referred to in Clause 4 (a) above of Barrick Niugini or any Concerned Affiliate (including any decision by the Commissioner General of Internal Revenue to refuse an objection lodged by Barrick Niugini in respect of any such purported Tax Liability).

Then Barrick Niugini shall be entitled to immediately terminate this agreement by written notice to the State within 30 days of becoming aware of such action and this Agreement will be of no further force or effect except to the extent that Barrick Niugini or the State has accrued rights under it or a provision of this Agreement is stated to survive termination of this Agreement.

Mr Lelang said: “This clearly shows that this Government has consented to have Barrick pay for the reopening of the mine and the much-celebrated increased stake in the mine by the State, Mineral Resources Enga and landowners with the money owed to the State by this company.

“This tax liability was incurred by Barrick before the closure of the mine. No way can that company bring its old tax liability forward as a condition of the reopening of the mine.

“And yet this Prime Minister and his government have first closed an operating mine and then allowed the country to be hoodwinked into believing they were getting a better deal when it was their own money being used to arrange the New Porgera Deal.

“To now act as if the tax liability issue is something new that has come up which might affect any reopening of the mine is a travesty and a grave injustice for the people of Porgera, of Enga and of Papua New Guinea. It is tantamount to our government colluding with a multinational company to defraud the State.

“Porgera cannot reopen until this three-man panel completes its work and then there is no guarantee that it will re-open at all.”

“The mine must re-open on March 31st as envisaged while Barrick revolves its legacy issues and its tax liabilities.

“We ask the Prime Minister NOT to give into the company. He is duty bound to support the IRC. If Barrick Niugini will play hard ball that we must look to new miners to take over the mine.

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