The Papua New Guinea Government is poised to transform its tax system with the recent signing of a significant contract for a real-time Goods and Services Tax (GST) Monitoring System (GMS). This contract, awarded to Virtual Flex Limited in collaboration with Data Tech International (DTI), was officially signed earlier this month by the Governor General, signaling the beginning of a nationwide implementation.
The GMS, which incorporates DTI’s internationally recognized TaxCore technology, aims to digitally track GST transactions at points of sale, such as cash registers in supermarkets. This system is expected to significantly mitigate issues such as tax evasion, fraudulent invoicing, and illegal suppression of sales.
Internal Revenue Commission (IRC) Commissioner General Sam Koim explained that the GMS will enable businesses to generate, transmit, and securely store electronic receipts directly with the tax office. Koim emphasized, “It ensures every kina in GST is accounted for,” highlighting the system’s importance in maintaining fiscal accountability.
The introduction of the GMS aligns with Papua New Guinea’s broader strategy for fiscal transparency and tax compliance, drawing inspiration from similar systems successfully adopted in countries such as Fiji. This initiative is expected to offer numerous advantages, including:
– Real-time sales monitoring and accurate tax reporting.
– Enhanced detection of fraud and accurate reporting.
– Increased voluntary compliance rates among businesses.
– A fairer commercial sector.
– Streamlined processes for GST refunds for compliant taxpayers.
Koim lauded all participants in the competitive procurement process and credited the Marape Government for its commitment to advancing smarter tax systems. According to him, this initiative is about cultivating a fairer and more accountable tax environment for everyone involved.
In addition to the GMS, the government has also approved a contract for an Integrated Tax Administration System (ITAS), which will further revamp the IRC’s internal operations and improve service delivery. The rollout of the GMS is expected to commence later this year, enabling businesses to transition to the new system with guidance from the IRC.
This initiative not only represents a step towards modernization in tax administration but also serves as a hopeful sign for improved revenue collection and governance in Papua New Guinea’s economy. By enhancing the integrity of its tax system, the government aims to boost compliance, fostering a fairer economic environment that benefits all citizens.
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