IRC expecting drop in revenue due to lockdown
The Covid-19 lockdown will have an adverse effect on tax Revenue collection, according to the Internal Revenue Commission (IRC).
It had previously estimated that due to the pandemic, there would be a revenue shortfall of K2.16 billion in a mild scenario.
Commissioner Sam Koim said yesterday that this figure might increase or decrease, depending on how bad the situation got and how long the restrictions were imposed for.
“At IRC, we are remobilising some of our strategies and activities that we mitigated the revenue shortfall,” he said.
“We are hoping that the shortfall is not as big as we anticipated.”
The business council of PNG has indicated that 68 per cent of businesses would shut down by the end of the year as a result of lockdowns.
Commenting on this, Koim said: “the Covid-19 is presenting unprecedented times so our trading partners are also having similar lockdowns and challenges and some of them will be going through a recession as well.
“Ourselves as well, there is a lot of restrictions on businesses and movements and all of these will (mean) we will be facing a lot of challenges.
“I can’t predict or quantify the figure of the number of businesses that will be out of business.
“IRC is not in the business of putting people out of business.
“So long as businesses remain, they will continue to pay taxes so that’s our aim.
“We can’t do much, there are other things that are beyond our control and the Covid-19 is presenting challenges.
“If businesses do face that kind of challenges or fate, then it will happen.
“That’s the reality that the Covid-19 is bringing.”
Koim said in terms of compliance, a significant number of debts had been repaid to IRC.
It is estimated that IRC is owed up to K1.8 billion since 2014.