PNG’s Mining Taxes Under Scrutiny as IRC Backs PM Marape Review
Papua New Guinea’s Internal Revenue Commission (IRC) has endorsed Prime Minister James Marape’s directive for a sweeping review of mining tax compliance, saying it reflects urgent issues identified by the commission’s own research.
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| IRC Commissioner General Sam Koim, OBE |
IRC Commissioner General Sam Koim, OBE, said that despite strong mineral prices and high export volumes, the Government’s revenue share from the mining industry remains disproportionately low. “Our data confirms that while PNG’s fiscal regime is theoretically sound, it is being undermined by tax avoidance schemes and structural weaknesses,” Koim said.
An IRC-IGF study showed PNG’s Average Effective Tax Rate should be about 74 percent — the highest among comparable mining countries — but actual data revealed the Government receives only about 12 percent. Koim described this gap as “a clear signal of systemic inefficiency,” adding that investors often exploit cost recovery provisions and related-party loans to delay or reduce tax obligations.
He said that from 2013 to 2023, none of the country’s major mines paid Dividend Withholding Tax despite export earnings increasing fivefold. “It defies logic that multi-billion-kina projects can go ten years without paying dividends,” Koim stated.
Koim noted that recent compliance initiatives have produced encouraging results. Since 2019, specialist audit teams have conducted detailed investigations into operating mines, lifting corporate income tax collections from K24 million in 2015 to a projected K2 billion this year. “This shows what targeted enforcement can achieve,” he said.
However, he stressed that compliance alone will not close the gap. “If our fiscal regime were recalibrated to deliver its full potential, PNG’s mineral wealth could secure real fiscal sovereignty,” Koim said.
The Commissioner General reaffirmed the IRC’s commitment to support genuine investors but warned against continued abuse of tax incentives. “Those who pay their fair share will be acknowledged, but those who hide behind loopholes will be exposed,” he concluded.
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