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June 15, 2021
Business News

PNG Customs detain container in smuggling, false declaration and tax evasion case

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Customs Chief Commissioner David Towe has warned importers that hefty penalties await them if their activities are found to be in breach of the Customs Act 2020 as amended.

This warning comes after a local importer was hit with a 100% penalty for an attempted tax evasion with false declaration of imports of alcoholic beverages.

The attempted tax evasion in Customs duties for the imported cargo amount is One Million, Seventy-five thousand three-Hundred and eleven Kina and Seventy-one toea (K1,075,311.71)

On top of the monetary penalty to recover revenue, the importer also faces prosecution under the Customs Act 2020 for smuggling, tax evasion and false declarations charges under the Customs Act.

The Chief Commissioner stated that penalties for Customs breaches are now more severe since Parliament amended provisions of the Customs Act, passed in November 2019.

The importer is alleged to have lodged an entry for the importation of 1,864 cartons of soft drinks, water, cider beer and ready mixed alcoholic drinks. The Customs duty on these items cost Forty-Eight thousand One Hundred and Forty-four kina and Sixty-six toea (K48,144.66).

However, when the container carrying the cargo arrived at Motukea International Terminal in February 2021 and was put through the Customs container x-ray machine, officers there detected discrepancies with the type of cargo displayed in the scan and the type of cargo listed in the entry, resulting in the container being detained and a thorough investigation conducted.

Investigative reports found that the container was in fact carrying 1,873 cartons of assorted alcohol in assorted quantities with a Customs duty value of K1,075,311.71.

The importer now has to pay K1,075,311.71 in Customs duty along with the 100% penalty of K1,075,311.71.

The importer MUST PAY to the State a sum of  K2,150,623.42 before he can take delivery of the goods. The importer will also be charged with smuggling, tax evastion and false delaration under the Customs Act.

Sir John Pundari, Finance Minister

This matter of tax evasion comes to light just days after Finance Minister, Sir John Pundari, warned investors not to avoid paying their taxes or be forced to cease their operations in the country.

Speaking in Porgera, the Finance Minister said the country is stretched with greater demand for service delivery however do not have the necessary buying power because cash amounts in the country are fast becoming scarce.

He urged big name investors in the country to follow the rules of this country or pack up and leave.

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