The Internal Revenue Commission (IRC) of Papua New Guinea has discovered a concerning pattern among Papua New Guinea’s leading mining companies that has raised a lot of red flags and questions about the performance of these mining operations.
A review from 2013 to 2023 revealed that none of the five major operational mines examined have paid any Dividend Withholding Tax (DWT). Despite a significant increase of over 20% in mineral export receipts, from K9,071.2 million in 2013 to K44,216.6 million in 2022 as reported in Bank of Papua New Guinea’s Quarterly Economic Bulletin Reports, there has been no dividend paid to the shareholders of these mining companies.
The DWT, mandated at 15% on dividends distributed to shareholders, serves as a crucial indicator of corporate profitability and investor returns.
The IRC Commissioner General, Mr. Sam Koim expressed serious concerns, questions if these companies are truly profitable.
“How can investors derive returns if dividends are non-existent? It defies logic that mines continue to operate while failing to compensate shareholders for their investments over the past decade. Or if they are paying their shareholders, how are they paying them, because it’s not paid as a dividend?”
This discovery raises questions about the financial health and transparency of these mining companies.
He said the lack of DWT payments suggests that either the companies are not generating sufficient profits to distribute dividends, or they are finding ways to avoid this tax obligation, potentially depriving the government and shareholders of crucial revenue.
Meanwhile, the IRC is auditing several mining companies to ensure compliance with the country’s tax laws.