The Public Accounts Committee inquired into the Internal Revenue Commission, Bank of PNG with Finance and Treasury Departments.
The proceedings centered on Money Laundering and its Prevention in the country.
The inquiry proceeded at the B2 Conference room at parliament house. Only PAC Chairman and Bogia MP John Hickey was present as other PAC Members were in parliament session.
With recent reports of Money Laundering or the illegal movement of money out of the country by well–organised international individuals or groups still fresh, the Public Accounts Committee inquired into the line departments, Internal Revenue Commission, Bank of PNG, Finance and Treasury Departments to know if there were policies in place to prevent the practice.
IRC Commissioner General Betty Palaso told the Committee that the Internal Revenue Commission only plays a supporting role and steps in when it comes to tax issue, such as tax avoidance or when large sums of monies are not declared. IRC also issues tax certificates to authorise funds to be transferred overseas.
The Internal Revenue Commission, under the Tax Act, can obtain bank records and information but doesn’t have powers to prosecute those involved. It can only refer them to appropriate authorities. The PAC was concerned that this grey area must be addressed.
The Committee was told that most money laundering occurs in Commercial Banks.
The regulator, Bank of PNG, was represented by Governor Loi Bakani. He also admitted the Central Bank has no power to prosecute, but works closely with IRC to prevent the illegal movement of funds abroad.
BPNG is also member with international financial anti – money laundering Committees that advocates against money laundering.
The Finance and Treasury Departments were represented by Acting Secretaries Dr Ken Ngagan and Dairi Vele respectively.
They admitted that they needed to be one step ahead of money laundering and as such all government payments above K50, 000 goes through the Secretaries for Approval.
Going forward, Internal Revenue Commission, Bank of PNG, Finance and Treasury Departments have policies and mechanisms’ in place to combat money laundering but need extra support from the government and line departments to fully enforce them and perhaps combat or prevent money laundering.