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PAPUA NEW GUINEA RAINFOREST CAMPAIGN NEWS

Papua New Guinea Loggers Cost the Country - Time to Shut Them Down

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Forest Networking a Project of Forests.org, Inc.

  http://forests.org/pngforest.html -- PNG Rainforest Portal

  http://forests.org/pngtoktok/ -- Discuss PNG Rainforests

 

11/18/00

OVERVIEW & COMMENTARY

The plunder of Papua New Guinea's rainforests continues unabated. 

The following article highlights the fact that very few taxes are

generated due to systematic tax evasion.  Given the facts that 1) the

industrial log export industry pays essentially no taxes and provides

minimal other economic benefits, 2) that ecosystems and their

functions are declining causing widespread hardship, and 3) the

diminished forests have less potential to support development and

local needs in the future; the PNG log industry operates at a net

loss for the country.  After 15 years of efforts to reform the

industry, it is time to acknowledge it is irredeemable.  The current

Papua New Guinea logging industry is bad for the country and must be

halted and dismantled.  In coming months, Forests.org will be

pursuing a campaign to stop and ban industrial log export from Papua

New Guinea and move towards community based, certified production. 

We hope you will join us in this exciting campaign.  Expect to hear

more soon.

g.b.

 

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RELAYED TEXT STARTS HERE:

 

Title:  Logging industry bad tax evaders 

Source:  Copyright, 1999, Post-Courier Online (Papua New Guinea)

Date:   November 10, 2000 

 

THE Internal Revenue Commission should vigorously pursue logging

companies that do not pay taxes, it has been recommended to the

National Government.

 

Prime Minister Sir Mekere Morauta said yesterday that out of the 27

logging companies operating in Papua New Guinea, only 14 had paid

corporate income tax.

 

"This is despite the fact that many of these companies have been

operating for more than five years," the Bogan tax review committee

said in its report.

 

"One company has been operating for more than eight years without

posting a taxable income. The 14 tax paying companies paid a total of

only K21.7 million throughout their corporate lives. On average, the

logging companies pay only K143,000 in corporate income tax each

year.''

 

The report said that these data posed the question why some logging

companies had not reported profits for many years? And if so, why has

the IRC not pursued these companies to see whether there has been any

transfer pricing, using their powers under the Income Tax Act?

 

The committee recommended that logging companies should not pay the

value added tax, and that the sale and export of unprocessed logs be

treated in the same manner as any other product for the purposes of

VAT, which would mean zero rated for VAT purposes when sold overseas.

 

The committee recommended that the excise tax on gaming machines be

reduced from 150 per cent to 70 per cent.

 

It said the distribution of gross profits from gaming be amended so

that 62 per cent be paid into consolidated revenue as opposed to the

current 60 per cent, 6 per cent to the provincial trust account

(currently same), 24 per cent paid to site owners as opposed to the

current 22 per cent, 8 per cent to operators against the current 4

per cent.

 

The committee found that people who played poker machines paid about

K105 million a year.

 

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