Papua New Guinea’s tax system has been a challenge for years, with taxpayers shouldering a heavy burden and concerns about maintaining revenue. The Independent Revenue Commission (IRC) understands the challenges faced by taxpayers and has been taking steps to improve tax administration to boost revenue without increasing tax rates.
IRC Commissioner of Tax, Mr. Samuel Loi, recently participated in the MINDS-MEET Forum Panel Discussion, where he highlighted the need for a balanced approach to tax reform. The event, held on July 5th, 2024, in Port Moresby, brought together experts to discuss reforms aimed at alleviating the tax burden without compromising revenue.
The panel discussion covered key topics such as taxation policies, reducing Salaries and Wages Tax, and increasing tax bases. Experts shared their views on potential policy options for reforming Papua New Guinea’s tax regime based on global best practices and theoretical approaches.
However, Mr. Loi emphasized the IRC’s practical approach, which has seen substantial tax revenue growth over the last three years under Commissioner General Sam Koim’s leadership. This success has been achieved through effective collection and improving source collection mechanisms.
Mr. Loi outlined the IRC’s 7 strategic pillars and main priorities, including revenue trends over the last 20 years. The data shows that revenues have grown significantly without any major tax rate increases.
The IRC expects revenue growth to continue in the near future and medium term, but this will not come from raising tax rates. Instead, the focus will be on leveraging administrative interventions to enhance tax collection and compliance efforts. This pragmatic approach aims to generate more revenue by optimizing the collection of existing taxes, rather than increasing the tax burden on citizens and businesses.
The IRC is committed to a balanced approach to tax reform, focusing on optimizing existing taxes rather than increasing tax rates to boost revenue. This practical approach has already shown significant results in improving revenue growth without burdening taxpayers.