In a recent development, the Internal Revenue Commission (IRC) has discovered a concerning pattern among Papua New Guinea’s leading mining companies.
A review from 2013 to 2023 revealed that none of the five major operational mines examined have paid any Dividend Withholding Tax (DWT).
Despite a significant increase of approximately 389% in mineral export receipts, from K9,071.2 million in 2013 to K44,216.6 million in 2022 as reported in Bank of Papua New Guinea’s Quarterly Economic Bulletin Reports, there has been no dividend paid to the shareholders of these mining companies.
Commissioner General Sam Koim (Pictured) said that the DWT, mandated at 15% on dividends distributed to shareholders, serves as a crucial indicator of corporate profitability and investor returns.
He said it defies logic that mines continue to operate while failing to compensate shareholders for their investments over the past decade.
This discovery raises questions about the financial health and transparency of these mining companies. The lack of DWT payments suggests that either
- the companies are not generating sufficient profits to distribute dividends, or;
- they are finding ways to avoid this tax obligation, potentially depriving the government and shareholders of crucial revenue.
The IRC is auditing a number of mining companies to ensure compliance with the country’s tax laws.
