Two men were arrested this month in relation to tax fraud and corruption.
The first case relates to GST refund fraud where a Paul James Kelly from Gumini in Chimbu Province, impersonating as an executive of a Kiunga based taxpayer, collected a GST refund cheque of K677,000 from IRC in November 2019 with the assistance of an IRC officer (terminated on another matter in 2020). The accused had inside information on the existence of the GST credits of the Kiunga based taxpayer and hence produced fake IDs and letters purportedly authorizing him to collect the cheque on behalf of the taxpayer.
Mr. Kelly had difficulty cashing the cheque and hence held onto the cheque for almost a year.
On 30th October 2020, the suspect deposited the cheque into the Kiunga based taxpayer’s bank account and travelled with the copies of the deposit and the cheque to Kiunga on 9th November 2020 to negotiate a deal. He fronted up at the Kiunga-based taxpayer’s office where he was arrested and charged. He was flown into Port Moresby last week to face the committal Court here in NCD.
The second criminal case involves an IRC Officer, a Gilbert Sero, who was arrested and charged last week for soliciting bribes to process Certificate of Compliance (COC) for a taxpayer.
On the 7th December 2020, between 8am and 9am the Internal Investigation Division (ID) of IRC received an Intel from the security officers manning the main foyer at the Revenue Haus that the officer was sighted receiving cash from a Taxpayer outside of the Big Rooster Café in Down Town Port Moresby. ID Investigators acted quickly upon receiving the Intel and took the officer in for questioning, and in the process confiscated a total of K1300.00 unexplained cash from the officer on that day. It was discovered upon a further investigation that the same Officer had solicited around K400.00 cash from a Taxpayer (identified) to process a COC.
On 18th December 2020, the officer was arrested and charged by Police with one (1) of Official Corruption. He is facing concurrent disciplinary charges under the IRC Commission Administrative Order.
In announcing the arrests, Commissioner General Sam Koim said “these arrests set the momentum for tax crime investigations and prosecutions that will be carried out next year. We have been concentrating on fixing the in-house which also included getting rid of corrupt officers. GST refund has been a very high risk area and so far, I have terminated 6 officers in that section on grounds of corruption. We are introducing some stringent measures now. We are also working on electronic transfer of GST refunds to prevent incidents of cheque fraud such as the first case.”
Mr. Koim said “administrative Corruption usually occurs at the meeting of two factors: “opportunity” and “motive”. We are increasing staff incentives as well as setting up a robust system of detection and harsh punishment (deterrence) to deal with the “motive” element. We are introducing reforms and automation to reduce the “opportunities” for corruption, as well as redistributing discretion instead of vesting it in one person in areas where the risks are high. The recent rearrangement of COC processing protocols is one such measure to reduce the incidents of COC corruption. COC is free of charge and system-generated hence no one should be charging anyone to obtain one.”
“As part of the in-house cleaning up, I have terminated a lot of officers this year some of whom are very skilled but for their sleazy behaviors,” the CG added.
The Former Chairman of the Investigation Taskforce Sweep sternly warned those who engage in tax fraud schemes to reflect on their lives during the Christmas period with a view to changing their behavior, as continuing the fraudulent path may lead them to only one destination – prison!.