Papua New Guinea's Attorney General Rebukes Australian Senator Over NRL Funding Critique

 The Internal Revenue Commission (IRC) of Papua New Guinea has raised serious concerns about the nation's leading mining companies. An extensive review covering the years from 2013 to 2023 revealed that none of the five major operational mines paid any Dividend Withholding Tax (DWT) during this period.

This discovery is particularly alarming given the substantial increase in mineral export receipts over the past decade. According to the Bank of Papua New Guinea's Quarterly Economic Bulletin Reports, these receipts surged by over 20%, from K9,071.2 million in 2013 to K44,216.6 million in 2022. Despite this significant growth, shareholders of these mining companies have not received any dividends.

Sam Koim

The DWT, mandated at 15% on dividends distributed to shareholders, is a crucial indicator of corporate profitability and investor returns. Commissioner General Sam Koim has expressed serious concerns over this situation, questioning the financial practices of these mining companies. "Are these companies truly profitable? How can investors derive returns if dividends are non-existent? It defies logic that mines continue to operate while failing to compensate shareholders for their investments over the past decade," Koim stated.

The absence of DWT payments raises fundamental questions about the financial health and transparency of these mining firms. It suggests that either the companies are not generating sufficient profits to distribute dividends or they are finding ways to avoid this tax obligation. This potential tax avoidance strategy deprives both the government and shareholders of essential revenue.

Commissioner General Koim further questioned the mechanisms through which shareholders might be receiving returns, if not through dividends. "If they are paying their shareholders, how are they paying them, because it's not paid as a dividend?" he asked, highlighting the need for greater scrutiny.

In response to these findings, the IRC has launched audits of several mining companies to ensure compliance with the country's tax laws. These audits aim to uncover any discrepancies and enforce adherence to legal tax obligations.

The outcome of these audits will be closely watched, as they could have significant implications for the mining sector in Papua New Guinea, as well as for the broader economic and regulatory environment.

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Papua New Guinea's Attorney General Rebukes Australian Senator Over NRL Funding Critique