Response to Covid-19: Tax and PNG labour and immigration measuresPapua New Guinea | Tax Alert

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Response to Covid-19: Tax and PNG labour and immigration measures

In this issueWe refer to our Tax Alert of 2 April 2020, and specifically Phase 1 of the IRC Covid 19 response. In this issue we elaborate further on these measures based on an Explanatory Note subsequently released by the IRC. We also update you on a recent notice from the Office of the Registrar of Companies (IPA) and PNG Immigration.

Explanatory Note on Phase 1 of COVID-19 measures announced and effective from 1 April 2020The IRC has issued an Explanatory Note to clarify its notice on 1 April 2020 regarding the IRC’s Phase 1 of the COVID-19 response. We summarise below the IRC’s Explanatory Note.

Tax Type Measure Explanation of Measure

Salary and Wages Tax (SWT)

Extension of Amnesty with 1 month until 30 April 2020

The same conditions for the amnesty continue to apply, namely- • All SWT returns must be up to date including December 2019. • Use of GST credits to offset SWT will not be allowed. • Any SWT debt established from an IRC audit will not qualify under this amnesty. • Where taxpayer’s SWT base tax is zero but the taxpayer has penalties outstanding as at the start of the amnesty, payment of 10% the penalties will result in the remaining balance being remitted.

• No extensions from Tax Agents will be granted.

We remind you that formal notification to the Amnesty Co-ordination team at the IRC must be given in order to access the amnesty.

Corporate Income Tax

Extension of Filing Due Date (this does not apply to SWT) 

The due dates for tax agents that do bulk filing is extended by two months. Accordingly, your due date agreed with your Tax Agent is extended by two months.

Original Due Date for 2020 New Due Date

30 April 2020 30 June 2020

31 May 2020 31 July 2020

30 June 2020 31 August 2020

31 July 2020 30 September 2020Corporations that do not use a Tax Agent can request an extension which will be considered on a case by case if they can demonstrate that COVID-19 impacted their business. Notwithstanding an extension, the penalties for late submission and payment are pardoned for 2 months in any case of non-compliance.

All queries or submissions seeking relief under this measure should be directed to the Director Tax Agent Liaison, Policy & Advice (see email at bottom of table). Should you require assistance in this regard, please contact us.

Deferral of Tax Payments (measures to support business cash flow)   

The payment of CIT is postponed until 30 June 2020 for Taxpayers that receive an assessment for CIT under the 2020 lodgement program before 30 June 2020 and can show that COVID-19 impacted them. Taxpayers can opt to pay the tax due in instalments until the end of 2020.Taxpayers who applied for extension under the lodgement program prior to the announcement of the relief measures (i.e. before 1 April 2020), is offered the same relief if they can demonstrate that they have been financially impacted by COVID 19. 

This relief measure is irrelevant for Taxpayers whose returns are filed by Tax Agents whose filings are postponed three months (see above) as they will not receive assessments for CIT before 30 June 2020.

This deferral does not apply to Provisional Tax and Advance Payments Tax.

Personal Income Tax (PIT)

Extension of Filing Due Dates

The due dates for tax agents that do bulk filing is extended by two months (refer to the table and extension dates above under CIT that apply similarly).

For individuals, non-corporate businesses, business owners etc. who are required to submit a Form I and do not use a Tax Agent can apply for extension if they can demonstrate that they have been financially impacted by COVID-19.

Although not expressly noted in the IRC’s Explanatory Note, based on the Notice from IRC, it appears that notwithstanding an extension, the penalties for late submission and payment are pardoned for 2 months in any case of non-compliance.

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Response to Covid-19: Tax and PNG labour and immigration measures

IPA exemption of certain statutory obligations for companiesIn response to the COVID-19 crisis the Office of the Registrar of Companies announced that in terms of sections 101(3) and 179(2) of the Companies Act 1997, all companies are exempted from strict compliance of Annual General Meetings, Preparation and presentation of financial statements and submission of Annual Return requirements until the State of Emergency (SOE) ends. This results in the waiver of- • Time limitations in holding Annual General Meetings;

• Time limitations in preparation and presentation of financial statements

• Penalty Fees for companies with late or outstanding Annual Returns. Companies are expected to pay only the online lodgement fee of K250 per lodgement.

The IPA’s front counters will remain closed during the SOE period. All lodgements to be done online. For any queries email the following: • Team Leader Companies: 308 4443/belindak@ipa.gov.pg

• Team Leader Non Companies: 308 449/kilai@ipa.gov.pg

• Team Leader Customer Services: 308 4495/allisons@ipa.gov.pg or ipaonline@ipa.gov.pg

PNG ImmigrationPNG Immigration issued a notice yesterday (8 April 2020) in light to the extension of the SOE. The key points from the notice are: • The Immigration Counter Service Area will be closed to the public, however their Client Service Branch will continue to provide assistance in receiving the extension, new entry & release of PNG Passports based on appointments via phone or emails.

• All visa fees are to be paid through the ICA Online portal on www.ica.gov.pg, as EFTPOS facilities will not be available at the Central Government Haus.

We will continue to update and inform you of measures announced during this time.

If you would like to discuss any of these measures, their impact or the making of a submission to Treasury or IRC, please let us know.

Deferral of Tax Payments (measures to support business cash flow)   

Refer to CIT: Deferral of Tax Payments (above) which applies to PIT payments as well.

Withholding Taxes

Deferral of automatic imposition of Tax Penalties

Taxpayers will be given a 21 day grace period from the due date of payment of withholding taxes. The penalty will only apply after the 21 days grace period.

This deferral of automatic imposition of penalties in respect of late payment of withholding taxes will apply until 30 June 2020. After 30 June 2020 the grace period will be switched off and penalties will be charged as and when taxes are due.

Goods Services Tax

Priority Refund (Measure to support business cash flow)

Priority for processing GST refunds for the following sectors: • medical services; • hospitality; • tourism; • manufacturing; • air transport; and • agriculture sectors.

Due to the priority of these GST refunds, the Commissioner General will be responsible for approving the final list of payments to be released. The normal verification process will be applied but more resources will be allocated to have the process expedited.

All queries and submissions for relief under the above measures can be sent to the following email address at the IRC: Tax_AgentLiaisonGroup@irc.gov.pg.

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