Papua New Guinea: joins global tax forum

Thursday 31st August 2023 marked a significant and historical day for Papua New Guinea (PNG) and the PNG Internal Revenue Commission (IRC). This is the day the significant leap towards international tax cooperation was made as PNG officially entered the global stage by ratifying and depositing two essential tax treaties.

Commissioner General of IRC, Mr Sam Koim, proudly announced PNG’s active participation in the Multilateral Administrative Assistance Convention (MAAC) and the adoption of the Multilateral Instrument (MLI). Both critical treaties have undergone successful ratification and have been formally deposited with the Organisation for Economic Cooperation and Development (OECD), establishing PNG’s presence within the realm of international tax collaboration.

The endorsement of the MAAC signifies PNG’s dedication to transparency and financial information exchange among 147 nations. Developed jointly by the OECD and the Council of Europe in 1988, with subsequent enhancements through a Protocol in 2010, the MAAC empowers countries to collectively address cross-border tax evasion. This milestone development aligns PNG with international efforts to promote financial integrity and combat illicit financial flows.

In addition to the MAAC, PNG’s adoption of the MLI is part of its commitment to the Base Erosion and Profit Sharing (BEPS) project. The MLI is a pivotal tool that aligns bilateral tax treaties across 100 nations with the BEPS project’s outcomes, thereby addressing gaps in existing international tax rules. By embracing the MLI, Papua New Guinea reinforces its determination to strengthen its existing tax agreements and ensure their harmony with global standards.

Commissioner General Koim emphasises that these tax treaties hold the potential to amplify Papua New Guinea’s ability to combat cross-border tax evasion and avoidance practices. Furthermore, the adoption of MAAC and MLI reflects a firm stance towards equitable taxation, where each taxpayer contributes their rightful share towards the nation’s growth and prosperity.

Papua New Guinea’s entry into the global tax forum through the endorsement of these treaties serves as a compelling testament to its commitment to responsible fiscal practices and international collaboration.

“As Papua New Guinea takes its place within the global tax community, it underscores its dedication to shaping a fair, transparent, and accountable tax environment that benefits both the nation and the international community. This significant step highlights Papua New Guinea’s proactive stance in aligning its tax policies with global best practices, thus paving the way for strengthened economic growth and prosperity. 

This development should also serve as a reminder to those who are engaging in cross-border tax evasion schemes that PNG Internal Revenue Commission now has the ability to source and exchange information to hold them accountable.” Mr Koim added.

Both the MLI and MAAC come into force on 1 Dec 2023.

Authorised for release,

Sam Koim, OBE

Commissioner General