A new report has exposed massive tax evasion and financial misreporting by foreign logging companies, allegedly resulting in nonpayment of hundreds of millions of Kina in taxes. The independent US-based policy think tank, Oakland Institute, released the report yesterday, titled The Great Timber Heist: The Logging Industry in Papua New Guinea. The report says, Papua New Guinea is considered to have one of the richest forest and logging areas in the world, and as of 2015, has the highest level of exports of tropical Roundwood in the world. The report says despite these, PNG's collecting virtually no income tax from loggers claiming to be running at continued losses. It says the 15 largest logging companies in the country are continually reporting that their operations are making a loss and therefore not paying any income taxes. Over the last 12 years only one logging company saw a greater number of years with gains than losses, and one other company saw an equal number, while all other operators saw a much greater number of years with net losses. Researchers of the Auckland Institute claimed that the continued losses can be attributed to mis-pricing and aggressive transfer pricing practices, with logging companies continually under-reporting the price of their exports, while inflating the inflation to mask and profits made.
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