The Internal Revenue Commission (IRC) of Papua New Guinea (PNG) is stepping up its mission to crack down on tax fraud, including that of the Goods and Services Tax (GST). The IRC Commissioner General, Mr. Sam Koim in a statement revealed that they have observed some fraudulent trends in the GST declarations submitted to the IRC. He said they have discovered some of the deeply troubling patterns and will work towards fully dealing with this very serious matter in breach of the county’s tax laws. “At the outset, it is critical to understand that a tax return, whether signed by a taxpayer or a tax agent, is a binding declaration of the accuracy of the provided information. False declarations are not taken lightly and come with severe penalties,” stressed the Commissioner General. “In response to the escalating instances of fraud, we have ramped up our vigilance, especially concerning GST credit returns.” He said the IRC has uncovered multiple instances where related parties are fabricating invoices or supplies to artificially inflate their GST Suppliers' Listings. “For example, Company A claims input credits from related entities B and C. These companies might not realize that we cross-check these input claims against third-party data, including Customs import records and bank transactions,” he went on to explain the process. “Verification extends beyond possessing an invoice—it involves tracking cargo movements, financial transfers, and matching invoices. Furthermore, we ensure that the suppliers, such as Companies B and C, have declared this income in their tax returns.” He went on to say that they have also discovered alarming discrepancies between GST declarations and Corporate Income Tax (CIT) returns. “Certain taxpayers consistently report a credit position annually, which contradicts the nature of their business operations. Others show higher expenditures than earnings in their GST returns without corresponding income declarations in their CIT returns.” “We have also found numerous cases where taxpayers regularly file GST returns but neglect to submit their annual CIT returns. Some individuals declare income solely for GST refund purposes, leading to significant mismatches when CIT returns are not filed.” He further added that because of this, they are now issuing default CIT assessments based on the information provided in GST returns. “We are also witnessing in the GST and CIT returns that most of the cash sales income are not declared. Some of those undeclared income finds its way in the expenditures listing, where taxpayer seems to spend more than the income declared.” Nevertheless, Mr. Koim said the IRC has developed measures to address this matter. “We have developed some matrix, including the launch of a project, to detect and penalise taxpayers for such evasive behaviour,” he said. He said the newly established Tax Crime Division of the IRC is actively investigating several GST-related fraud cases and will soon initiate prosecutions. “Let this serve as a stark warning, we are intensifying our efforts to detect and address fraudulent behaviors. The IRC is unwavering in its commitment to safeguarding the integrity of our tax system,” Mr. Koim further stressed, warning those who would attempt tax fraud.