MEDIA RELEASE: ADDRESSING TAXPAYER CONCERNS ON TIN REGISTRATION
Internal Revenue Commission PNG
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Internal Revenue Commission PNG
Our vision is to build the foundation of a robust, modern, and efficient tax administration in Papua New Guinea (PNG)
The Commissioner General, Sam Koim, has taken decisive steps to address concerns regarding Taxpayer Identification Number (TIN) registration and other processing issues. "We have replaced senior leadership within the divisions responsible with a fresh and dedicated team to improve our frontline services to taxpayers," stated Mr. Koim.
Highlighting the challenges inherent in taxpayer registration, Mr. Koim emphasized, "We have, on our taxpayer register, a total of 245,122 TIN holders as of the end of last year. More than half of these TINs are inactive, meaning non-compliant. In the last five years (since 2018), TIN registrations grew by 99%, whereas Active TINs grew by 47%, but the overall compliance rate relative to the TINs is still low. On average, we register about 2000 TINs monthly."
Obtaining a TIN comes with the responsibility to file once a year, either a Corporate Income Tax (CIT) return for companies or a Personal Income Tax (PIT) return for individuals, irrespective of whether you are actually doing business. However, Mr. Koim pointed out, "Despite this obligation, numerous TIN holders have neither paid taxes nor filed returns since obtaining their TINs, some even obtaining multiple TINs without legitimate business purposes."
The challenges in taxpayer identification include instances of individuals providing false addresses or registering under fictitious names. Mr. Koim added, "Some act as agents to register multiple TINs, and once TINs are obtained from IRC, the TIN holders are nowhere to be found." Additionally, misrepresentation of business activities complicates enforcement efforts, with some registering for transport businesses but engaging in undisclosed construction activities.
Moreover, taxpayers sometimes provide inaccurate information about their business location, further complicating tax enforcement efforts and contributing to revenue leakage. Mr. Koim noted, "With the ease at which one can incorporate a business name or company at the Investment Promotion Authority, it adds to another layer of challenge for us."
"To address these challenges," Mr. Koim stated, "we have undertaken a comprehensive three-year taxpayer mapping exercise, successfully identifying the business locations of entities operating in each province nationwide. We have also identified businesses with inactive TINs that we are now working to bring them to the compliant status."
In line with our commitment to improve tax compliance, plans are underway for a major TIN deregistration exercise targeting inactive holders linked to active bank accounts. Banks will be directed to close the bank accounts of inactive TINs.
Additionally, a risk-based TIN registration system will be implemented to deter frivolous registrations and curtail the challenges we face with TIN registrations and taxpayer identification. Mr. Koim emphasized, "Adopting a risk-based TIN registration approach is imperative to foster substantive compliance. We cannot sacrifice substantive compliance on the altar of expediency. Our baseline for compliance is ‘non-compliance’ hence we cannot adopt methods that work in compliant environments to work effectively in this country.”
We are also exploring digital tools to automate and expedite the risk-based TIN registration process. Meanwhile, manual risk-based checks will still be conducted. We, therefore, encourage taxpayers to understand our processes and bear with us as we process their TIN Applications judiciously.
Many of the complaints seem to come from freelance agents who collect fees from na?ve applicants to produce same-day service. “I would like to inform the public that there is no fee for TINs and no one-day service. We do have online TIN Application forms and email addresses for TIN Applications to be submitted via email.” Mr. Koim added.
The new measures will also include rejecting the applications lodged by people with multiple TINs but failed to comply with their reciprocal tax obligations.
The taxpayer registration process is crucial as it serves as the gateway to the tax system, impacting resource allocation and compliance efforts. Without a reliable registration process, we will struggle to identify taxpayers, accurately assess their tax obligations, and detect potential tax evasion or fraud. By prioritizing quality and accuracy over quantity in TIN registrations, we mitigate the risk of introducing inaccuracies and inefficiencies into the tax administration, hence these measures.
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Authorised for Release,
Sam Koim, OBE
Commissioner General
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Resettlement @ Newmont
9 个月Please Internal Revenue Commission PNG, my Housing Allowance Variation application is still pending at your desks. Have followed up numerous times but still no response. I am situated in Lae. Please help.
Project Administrator/Controller
9 个月The people who generating TIN certificates were not doing their assigned tasks properly. They need bribery to generate TIN certificates while people were lining up at the IRC building every day for progressive updates and no one seems to turn up for assist... What are hopeless people working at IRC office and why recruiting such behaviour problems????