June 2011 Report - PNG Customs Service
June 2011 Report - PNG Customs Service June 2011 Report - PNG Customs Service
22 nd August 2011 Hon. Don Polye Minister for Treasury Department of Treasury Vulupindi Haus P. O. Box 710 Waigani 131 National Capital District My dear Minister, ACTIVITY REPORT FOR JUNE 2011 Whilst I present the Monthly Activity Report for June 2011, I wish to congratulate you on behalf of PNG Customs Service on your appointment to the Finance and Treasury ministry in the new government. With great pleasure we look forward to working with you in addressing some of the critical issues relating to Customs operations. Minister, on the revenue matter Customs revenue collections for the month of June were lower than 2011 Budget estimate by – K5.54 million or -3%. The actual collections totalled K165.36 million compared to an expected K170.90 million. This is a decrease of - 1% (- K1.15 million compared to K166.51 million) in the equivalent period last year. When the June figures are added to the outcome for previous months in 2011, the aggregate collections for the January to June period are higher than the Budget forecast (by K85.66 million, or 9% ahead K974.35 million estimate). The desirable collections for the month is attributed to higher import GST (K8.24 million), import duty (K3.03 million) and export duty (K2.87 million). Nominal Revenue comprising of foregone duties and actual collections have shown a massive surplus of K56 million. Total collections would have reached K2826.50 million and that was well above the expected collection of K170.90 million. Minister, albeit shortfalls in local excise (- K14.20 million) and import excise (- K5.32 million), I am delighted to inform you that the considerable aggregate collections have offset the deficit at a level which is higher than the equivalent end-June period last year. Yours sincerely, Gary Juffa Commissioner of Customs. cc: Manasupe Zurenuoc Chief Secretary Department of Prime Minister and NEC
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22 nd August <strong>2011</strong><br />
Hon. Don Polye<br />
Minister for Treasury<br />
Department of Treasury<br />
Vulupindi Haus<br />
P. O. Box 710<br />
Waigani 131<br />
National Capital District<br />
My dear Minister,<br />
ACTIVITY REPORT FOR JUNE <strong>2011</strong><br />
Whilst I present the Monthly Activity <strong>Report</strong> for <strong>June</strong> <strong>2011</strong>, I wish to congratulate you on<br />
behalf of <strong>PNG</strong> <strong>Customs</strong> <strong>Service</strong> on your appointment to the Finance and Treasury<br />
ministry in the new government. With great pleasure we look forward to working with you<br />
in addressing some of the critical issues relating to <strong>Customs</strong> operations.<br />
Minister, on the revenue matter <strong>Customs</strong> revenue collections for the month of <strong>June</strong> were<br />
lower than <strong>2011</strong> Budget estimate by – K5.54 million or -3%. The actual collections<br />
totalled K165.36 million compared to an expected K170.90 million. This is a decrease of -<br />
1% (- K1.15 million compared to K166.51 million) in the equivalent period last year.<br />
When the <strong>June</strong> figures are added to the outcome for previous months in <strong>2011</strong>, the<br />
aggregate collections for the January to <strong>June</strong> period are higher than the Budget forecast<br />
(by K85.66 million, or 9% ahead K974.35 million estimate).<br />
The desirable collections for the month is attributed to higher import GST (K8.24 million),<br />
import duty (K3.03 million) and export duty (K2.87 million). Nominal Revenue comprising<br />
of foregone duties and actual collections have shown a massive surplus of K56 million.<br />
Total collections would have reached K2826.50 million and that was well above the<br />
expected collection of K170.90 million.<br />
Minister, albeit shortfalls in local excise (- K14.20 million) and import excise (- K5.32<br />
million), I am delighted to inform you that the considerable aggregate collections have<br />
offset the deficit at a level which is higher than the equivalent end-<strong>June</strong> period last year.<br />
Yours sincerely,<br />
Gary Juffa<br />
Commissioner of <strong>Customs</strong>.<br />
cc:<br />
Manasupe Zurenuoc<br />
Chief Secretary<br />
Department of Prime Minister and NEC
Activity report for <strong>June</strong> 22 nd August, <strong>2011</strong><br />
Stanis Hulahau<br />
Director General<br />
Office of Security Coordination & Assessment<br />
Mr. Simon Tosali<br />
Secretary<br />
Department of Treasury<br />
Mr. Andrew Oaeke<br />
First Assistant Secretary<br />
Economic Policy Division<br />
Department of Treasury<br />
Ruby Zariga<br />
Acting Secretary<br />
Department of National Planning & Monitoring<br />
Mr. Steven Gibson<br />
Secretary Department of Finance<br />
Mr. Loi Bakani<br />
Governor, Bank of Papua New Guinea<br />
Ms. Betty Palaso<br />
Commissioner General, Internal Revenue Commission<br />
Mr. John Kali<br />
Secretary, Department of Personnel Management<br />
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Activity report for <strong>June</strong> 22 nd August, <strong>2011</strong><br />
ACTIVITY REPORT FOR MONTH OF JUNE<br />
A. REVENUE COLLECTION<br />
Revenue Collection Outcomes in <strong>June</strong> <strong>2011</strong><br />
<strong>Customs</strong> Actual Expected Surplus/ Surplus<br />
Duties Collections Collections Shortfall in Shortfall<br />
Collections (%)<br />
Collections Import Duty 21.88 18.85 3.03 16%<br />
in <strong>June</strong> Import GST 82.69 74.45 8.24 11%<br />
Import Excise 11.21 16.53 - 5.32 -32%<br />
Export Duty 20.68 17.81 2.87 16%<br />
Inland Excise 28.75 42.95 - 14.20 -33%<br />
Sundry Receipts 0.15 0.31 - 0.16 -52%<br />
Total 165.36 170.90 - 5.54 -3%<br />
Cumulative Import Duty 119.55 120.72 - 1.17 -1%<br />
Collection to Import GST 504.26 430.06 74.20 17%<br />
end - <strong>June</strong> Import Excise 103.04 99.91 3.13 3%<br />
Export Duty 121.07 90.11 30.96 34%<br />
Inland Excise 209.66 231.12 - 21.46 -9%<br />
Sundry Receipts 2.42 2.43 - 0.01 0%<br />
Total 1,060.01 974.35 85.66 9%<br />
* (Collections expressed in 'Millions of Kina)<br />
Total Collections in <strong>June</strong> <strong>2011</strong> – K165.36 million<br />
Summary collections for the month of <strong>June</strong> <strong>2011</strong> were K165.36 million. This is K5.54<br />
million or 3% lower than the <strong>2011</strong> Budget expectation of K170.90 million. Compared to<br />
the equivalent prior-year month of <strong>June</strong> 2010, the result is 1% lower than the K166.51<br />
million collected in that month.<br />
The following duties collected were above projected receipts for <strong>June</strong> <strong>2011</strong>; Import gst,<br />
import duty and export duty. On the contrary local excise and import excise recorded<br />
deficits. Significant variations in total <strong>Customs</strong> duties comprise stronger than expected<br />
import gst (K8.24 million), import duty (K3.03 million) and export duty (K2.87 million)<br />
whilst local excise (-K14.20) and import excise (-K5.32 million) were lower than expected.<br />
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Activity report for <strong>June</strong> 22 nd August, <strong>2011</strong><br />
Surplus of K8.24 million – <strong>June</strong> <strong>2011</strong> Import GST Collections<br />
Import gst collections for the month of <strong>June</strong> <strong>2011</strong> of K82.69 million was higher than<br />
projection, with surplus of K8.24 million (or 11%) compared to the Budget estimate of<br />
K74.45 million. This surplus is attributed to increase in the volume of international trade<br />
on general imports with a suspected fall in import gst concessions granted to mining<br />
industries.<br />
Surplus of K3.03 million – <strong>June</strong> <strong>2011</strong> Import Duty Collections<br />
Import duty collections for the month of <strong>June</strong> <strong>2011</strong> totalled K21.88 million that was<br />
K2.71million (16%) more than the Budget forecast of K18.85 million, and 22% higher<br />
than the amount collected for the equivalent period last year. This increase was due to<br />
rise in the international trade resulting in increased volume of import especially for goods<br />
with higher tariff rates. Bigger proportion of this duty is collected from the two major ports.<br />
Lae accounted for 36% or K7.96 million while Port Moresby collected 33% or<br />
K7.13million. The residual (31%) was collected from other ports.<br />
Surplus of K2.88 million - <strong>June</strong> <strong>2011</strong> Export Duty Collections<br />
Export duty collections of K20.69 million in <strong>June</strong> <strong>2011</strong> were K2.88 million above<br />
projections and 23% more than the collections for the equivalent period last year. The<br />
rise in export duty was due to increase in the volume of log exports in major logging<br />
ports. Kimbe port has collected 25% of the total exports which also means a reasonably<br />
large quantity than expected volume was exported in the month.<br />
The logging ports that contributed toward export duty for the month of May in descending<br />
orders were:<br />
• Kimbe collected K5.09 million, or 25% of total export duties,<br />
• Vanimo collected K3.50 million, 17% of total export duties<br />
• Rabaul collected K3.14 million, 15% of total export duties<br />
• Port Moresby collected K3.14 million, 15% of total export duties, while<br />
• Daru collected K2.16 million, 10% of total export duties<br />
• The rest of logging ports collected K2.14 million, or the remaining 18%.<br />
Shortfall of K14.20 million - <strong>June</strong> <strong>2011</strong> Local Excise Collections<br />
Domestic excise collections for the month of <strong>June</strong> of K28.75 million were lower than<br />
projection, with deficit of K14.20 million or - 33% less compared to the Budget estimate of<br />
K42.95 million.<br />
Most excise declarations were lodged in Port Moresby offices. Port Moresby accounted<br />
for 99% collection or K28.43; the shortage in this collection was due to decrease in the<br />
productions of cigarettes and alcohol with low compliance displayed by the respective<br />
producers.<br />
Shortfall of- K5.32 million – <strong>June</strong> <strong>2011</strong> Import Excise Collections<br />
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Activity report for <strong>June</strong> 22 nd August, <strong>2011</strong><br />
Import excise collections of K11.21 million in <strong>June</strong> <strong>2011</strong> were K5.32 million lower and<br />
32% lower the amount collected for the equivalent period last year. The shortfall in this<br />
collection was owing to decrease in the number of vehicles imported, petroleum products<br />
and electrical machinery and equipment imported in the fifth month.<br />
Port Moresby shift to maintain its record from last month as the highest collector from<br />
imports excise with K6.20 million followed by Lae port with K3.77 million. Other ports<br />
collected the remaining K1.24 million or 11%.<br />
The revenue collection for the month of <strong>June</strong> <strong>2011</strong> is illustrated by the following graph<br />
and table:-<br />
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Activity report for <strong>June</strong> 22 nd August, <strong>2011</strong><br />
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Activity report for <strong>June</strong> 22 nd August, <strong>2011</strong><br />
<strong>PNG</strong> CUSTOMS SERVICE<br />
Revenue Collection <strong>Report</strong><br />
<strong>June</strong> <strong>2011</strong><br />
Surplus<br />
Actual Actual Shortfall<br />
Collections Surplus/ Surplus/ Collections<br />
Compared<br />
to<br />
in <strong>June</strong> <strong>2011</strong> Projections Shortfall Shortfall in <strong>June</strong> 2010 May 2010<br />
<strong>Customs</strong><br />
Duties (K thousands) (K thousands) (K thousands) (%) (K thousands) (%)<br />
Import Duty 21,875,277.63 18,850,000.00 3,025,277.63 16% 16,972,465.33 22%<br />
Import GST 82,688,159.17 74,450,000.00 8,238,159.17 11% 87,272,963.36 -6%<br />
-<br />
Import Excise 11,211,741.73 16,530,000.00 5,318,258.27 -32% 17,711,739.87 -58%<br />
Export Duty 20,685,786.88 17,810,000.00 2,875,786.88 16% 16,008,770.05 23%<br />
Inland Excise 28,752,148.17 42,950,000.00<br />
-<br />
14,197,851.83 -33% 28,239,466.04 2%<br />
Sund Receipts 149,226.44 310,000.00<br />
-<br />
160,773.56 -52% 302,708.79 -103%<br />
Total Cust<br />
Duties 165,362,340.02 170,900,000.00<br />
-<br />
5,537,659.98 -3% 166,508,113.44 -1%<br />
B. CUSTOMS NON REVENUE COLLECTION ACTIVITIES<br />
<strong>Customs</strong> Activity Outcomes in <strong>June</strong> <strong>2011</strong><br />
Total<br />
Comments<br />
Number of officers 174 Officers at operation level 31 IEOs<br />
Officers at work 136 Exclude officers on recreational-leave<br />
Number of import entries<br />
& Whare house entries<br />
10,288 Declared import entries, including warehouse<br />
entries<br />
Number of export entries<br />
& Local Excise entries<br />
1,145 Declared export entries, including local excise<br />
entries<br />
Import and export<br />
examinations<br />
22 Container inspections. 30 cargo management<br />
officers<br />
Number of vessels cleared 133 Inward/outward clearance, general ships, yachts,<br />
and Foreign fishers
Activity report for <strong>June</strong> 22 nd August, <strong>2011</strong><br />
Trade Facilitation<br />
<strong>Customs</strong> efforts in upholding the mandated role in facilitating trade for legitimate traders’ in the<br />
month resulted in a total of 11,433 entries assessed and cleared of which 10,248 is comprised<br />
of import entries, 1,033 export entries, 112 local excise entries and 41 warehouse entries.<br />
Suffering immeasurable constraints with manpower, customs was however able to clear 11,433<br />
entries for the month of <strong>June</strong>. As usually entreated there is still greater need to beef up<br />
manpower to foster efficient and effective trade facilitation.<br />
Trade Volume<br />
A moderate decrease was seen in the entries lodged in the month of <strong>June</strong> compared to the<br />
equivalent period last year. In comparison to month of <strong>June</strong> 2010 there was a mere 1%<br />
decrease. The decrease indicates <strong>June</strong> <strong>2011</strong> period had less entries lodged compared to <strong>June</strong><br />
period 2010 with little effects on increasing trend for item line imports. This means there is<br />
increase in general trade volume in <strong>2011</strong> demonstrated by increased revenue collections<br />
particularly in the areas of import and export taxes.<br />
The declined entries have relief work load on each officer while the actual trade volume was<br />
high due to more item lines per entry. In the month of <strong>June</strong> about 369 entries were assigned to<br />
per invoice examining officer. On average 13 entries per day for each officer to process.<br />
Numbers of entries per officer for the month of <strong>June</strong> have remained unchanged.<br />
Community Protection<br />
With only 30 cargo management officers a total of 22 containers of imports and exports have<br />
been examined. The number of examinations has decreased dramatically during this period.<br />
Most ports failed to report the results of examinations. Only those entries that went through red<br />
lanes in the enhanced ASYCUDA system were subjected for inspections. The rest of the<br />
imports were cleared through presentation of legitimate documents.<br />
In overall 133 various vessels were cleared by 20 boarding officers around the country with 30<br />
reported on ship search.<br />
Total of 298 aircrafts cleared during this period and report shows a total of 25 searches<br />
conducted including light unscheduled aircrafts. Thorough checks carried out without detecting<br />
contrabands.<br />
Border Control<br />
International travellers have been carefully checked together with their personal effects.<br />
Transactions made under suspicious circumstances were given thorough checks. Numbers of<br />
international passengers had decreased to 34,315 during the month of <strong>June</strong> <strong>2011</strong>. Facilitated<br />
by 20 passenger processing officers all passengers passed clearance with no detections<br />
<strong>PNG</strong> <strong>Customs</strong> continued to perform <strong>PNG</strong> Immigration roles at the International Airports but still<br />
require Immigration to share the work load at the primary duty lines during passenger<br />
processing. However, with enhanced knowledge <strong>Customs</strong> officers did passport control at<br />
departures and arrivals at the international terminals. With shortage of manpower at the check<br />
points compared to the influx of travelling passengers <strong>Customs</strong> has managed to check all<br />
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Activity report for <strong>June</strong> 22 nd August, <strong>2011</strong><br />
passengers effectively and completed necessary clearance in the month of <strong>June</strong>. This<br />
therefore shows <strong>Customs</strong> is committed to protecting <strong>PNG</strong> borders and securing a safer<br />
community.<br />
Enforcement<br />
Following are enforcement activities;<br />
Revenue Recoveries<br />
Two revenue recovery exercises reported in the month of <strong>June</strong> <strong>2011</strong> at Lae <strong>Customs</strong><br />
offices.<br />
- A sum of K3,779.15 recovered through post notes issued for under payments on<br />
various imports and detections.<br />
Detections<br />
Penalty for illegal entries<br />
Two Japanese men were fined one thousand US dollars each for illegal entrance to <strong>PNG</strong> on a<br />
fishing vessel. The penalty for illegal entrance attracts about 20 thousand US dollars. This<br />
would be a more fitting deterrent to illegal aliens coming into <strong>PNG</strong> and engaging in illegal<br />
activities. The two Japanese did not have valid passport and work documents. They were<br />
working for a Japanese fishing company contracted by one of <strong>PNG</strong>'s fish canneries in the<br />
Morobe<br />
province.<br />
The border response unit in Lae did a search of the fishing vessel, did a face check of the crew<br />
with the passports and documents available and realised that two of the crew did not have<br />
passports or any travel documents and were therefore illegally in the country and were<br />
detained. They were interviewed and subsequently arrested and charged under the Migration<br />
Act. Each were fined and locked up at the police cells. They appeared before court where they<br />
plead guilty and were fined two-thousand-500 kina after they were convicted. They've been<br />
detained on the vessel until they left.<br />
A fishing boat was detained while the owners or the contractors were fined.<br />
For fishing there are no revenue implications as licenses are what generate revenues. So<br />
there's no implication for customs. <strong>Customs</strong> concern is on the movement of illegals and<br />
contraband that is being transported by fishing crew and onboard those vessels into the<br />
country, and the smuggling of flora and fauna and other high value items out of Papua New<br />
Guinea. Not specially the two but if any were found within the vicinity of the vessel, including<br />
undeclared tobacco and alcohol. After the investigations they were charged under the <strong>Customs</strong><br />
Act for having in possession of those prohibited imports.<br />
That was not illegal fishing that they're being charged with, they were charged for being<br />
unlawfully in the country. So under the Migration Act the maximum penalty is five-thousand<br />
kina, which is still not enough. They were given a lenient penalty of two-thousand-500, which is<br />
the minimum amount applicable or even the maximum fined of K5, 000.00 is not enough. It<br />
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Activity report for <strong>June</strong> 22 nd August, <strong>2011</strong><br />
should be more in the vicinity of 50-thousand or so with penalties being paid by the companies<br />
and persons who are harbouring them, and they too should be charged which was something<br />
<strong>Customs</strong> was exploring.<br />
Vessel Impounded<br />
Papua New Guinea (<strong>PNG</strong>) <strong>Customs</strong> have impounded a vessel in Popondetta which belongs<br />
to a Malaysian company.<br />
The apprehension of the Kifmet 16/17, a pontoon barge belonging to Unirise Ltd of Malaysia<br />
The National Forest Authority confirmed that the operations permit for Unirise limited expired<br />
in February 27 <strong>2011</strong> and there were no authorisation and approval plans given to the<br />
company to land the equipment.<br />
Vessel Seized<br />
Papua New Guinea (<strong>PNG</strong>) <strong>Customs</strong> have seized the vessel with millions of kina worth of<br />
logging equipment, which was impounded in March <strong>2011</strong> for breaching Papua New Guinea<br />
laws.<br />
A barge, pontoon and machinery imported (significant volumes of logging equipment) into<br />
the country by Growood (<strong>PNG</strong>) Limited impounded in Madang was seized by <strong>PNG</strong> <strong>Customs</strong><br />
<strong>Service</strong>s. The company owned by a Malaysian was unable to fine the penalty charge of K3<br />
million to settle outstanding duties and penalties after 30 days notice. All goods impounded<br />
are now become property of the State.<br />
Inspection on board the pontoon and barge by <strong>Customs</strong> officials revealed significant<br />
discrepancies including smuggling and false declarations of various goods, which included<br />
machinery, vehicles and fuel oil.<br />
<strong>Customs</strong> also cited the company for failing to comply with <strong>Customs</strong> laws and committing<br />
serious offenses in breach of the <strong>Customs</strong> Act.<br />
“A raid of the premises of the owner by <strong>Customs</strong> and Police during investigations also<br />
revealed several discrepancies in the importation of the machinery. “A passport and,<br />
documents, electronic files and other evidence was seized.<br />
Four vessels recently impounded by <strong>Customs</strong> had now being seized following the<br />
completion of investigation into the alleged breached of the <strong>Customs</strong> Act. The items seized<br />
on another two other vessels the tug boat and barge Kismet 18 and Kismet 19 in New<br />
Ireland Province were all undeclared and smuggled and would become state properties<br />
The companies were also liable to pay substantial fines imposed by <strong>Customs</strong>. The goods<br />
will be auctioned if the companies fail to pay the fines within a specific period of time.<br />
Substantial portion of the fuel was not declared. It was alleged the importer declared only<br />
50,000 litres of diesel, however, upon inspection, it was found that another 100,000 litres of<br />
diesel was not declared<br />
<strong>PNG</strong> <strong>Customs</strong> is committed to protecting the interests of <strong>PNG</strong> and would not tolerate<br />
businesses that attempt to circumvent.<br />
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Activity report for <strong>June</strong> 22 nd August, <strong>2011</strong><br />
Strongim Gavman (SGP) Activity<br />
During the month of <strong>June</strong>, the SGP Intelligence Adviser facilitated the development of Port<br />
Intelligence Assessments. In addition a range of Posters and brochures were designed for<br />
release later in the year in relation to the community liaison Wasman program.<br />
Throughout <strong>June</strong> a range of Cargo related initiatives were developed by the Cargo<br />
Management Adviser. First, a debt management policy was developed to support the recovery<br />
of outstanding duties/taxes and administrative penalties. Secondly, Broker Training in Lae,<br />
Kokopo and Port Moresby was supported as part ongoing effort to support the capacity building<br />
of <strong>Customs</strong> Brokers. Finally, a depot guideline was developed to assist in the facilitation of<br />
cargo and reduce blockages on the wharf.<br />
A large number of pieces of equipment were purchased under the Border Security Project.<br />
These will be delivered over the next few months.<br />
C. PHOTOS<br />
<strong>Customs</strong> Activity Photos for <strong>June</strong> <strong>2011</strong><br />
X-Ray Training – Lae<br />
<strong>Customs</strong> officer receives Certificate from facilitator while the<br />
Deputy Commissioner for Regional operation congratulates her.<br />
Participants displaying their Certificates with cheerful smiles<br />
backed by Deputy Commissioner. Thump up for the SGP .<br />
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Activity report for <strong>June</strong> 22 nd August, <strong>2011</strong><br />
<strong>Customs</strong> officers examine the machine.<br />
An officer feeling a taste for the x-ray<br />
machine<br />
Officers at <strong>Customs</strong> control area with the<br />
x-ray unit<br />
X-Ray Training – Pom<br />
Participants with cheerful smiles backed by Deputy<br />
Commissioner Border Security.<br />
<strong>Customs</strong> officer receives Certificate from Deputy Commissioner<br />
for Border Security while facilitators look on.<br />
Deputy Commissioner Border Security addresses the<br />
participants after end of the training program.<br />
An officer demonstrates to his counterparts how to operate the<br />
machine<br />
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Activity report for <strong>June</strong> 22 nd August, <strong>2011</strong><br />
Operation Pukpuk<br />
Ship search and container inspections conducted under the operation in Wewak.<br />
<strong>Customs</strong> officers converse with trading company before the<br />
search<br />
Physical Container inspection<br />
Documents verification checks<br />
Sample and quantity checks<br />
Seizures<br />
Uncensored CDs and DVDs being confiscated<br />
Confiscation of counterfeit mobile brand<br />
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Activity report for <strong>June</strong> 22 nd August, <strong>2011</strong><br />
Counterfeit mobile brand<br />
Destruction of seized CDs and DVDs<br />
Other photos<br />
<strong>Customs</strong> Agents in a joint meeting recently<br />
<strong>Customs</strong> Commissioner Mr. Gary Juffa with Pomat Manua<br />
(Chairman of BDA) and Ruby Zariga (Secretary for National<br />
Planning) at the Launching of Risk Management Plan<br />
Confiscation of counterfeit cigarettes<br />
SGP member shakes hand with <strong>Customs</strong> officer during the<br />
handing over of a vehicle to from SGP Team to <strong>Customs</strong> <strong>Service</strong><br />
Revenue Loss<br />
Month of <strong>June</strong> showed a hefty revenue leakage ensuing concessions granted on <strong>Customs</strong> duty<br />
and GST. The following table illustrates the outcome.<br />
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Activity report for <strong>June</strong> 22 nd August, <strong>2011</strong><br />
REVENUE LOSS THROUGH CONCESSIONS<br />
Jun-11<br />
<strong>Customs</strong><br />
Duty<br />
Actual<br />
Collections<br />
Loss of<br />
Revenue<br />
Nominal<br />
Revenue<br />
Projections<br />
Surplus/<br />
Shortfall<br />
Surplus/<br />
Shortfall<br />
Import<br />
Duty 21,875,278 9,040,806 30,916,083 18,850,000 12,066,083 64%<br />
Import<br />
GST 82,688,159 46,207,078 128,895,237 74,450,000 54,445,237 73%<br />
Import<br />
Excise 11,211,742 5,885,791 17,097,532 16,530,000 567,532 3%<br />
Export<br />
Duty 20,685,787 0 20,685,787 17,810,000 2,875,787 16%<br />
Inland<br />
Excise 28,752,148 0 28,752,148 42,950,000 -14,197,852 -33%<br />
Sundry<br />
Receipts 149,226 0 149,226 310,000 -160,774 -52%<br />
Total 165,362,340 61,133,674 226,496,014 170,900,000 55,596,014 33%<br />
A sum of K61.13 (K58.05) million was inevitably gone under the concession scheme which<br />
should have been part of the Aggregate Revenue collections for the month of <strong>June</strong> <strong>2011</strong>. This<br />
is K3.08 million more than the equivalent period in 2010. The three components that suffered<br />
under the concessions from the largest were import gst comprised K46.21 million, import duty<br />
experienced K9.04 million loss and import excise comprised K5.89 million.<br />
Exemptions on import gst include concessions given to goods imported by Charity<br />
organisations, Church groups, Pharmacies, Educational Institutions and Resource Companies.<br />
Exemptions on import duty cover goods imported under reduced rates particularly on mining<br />
companies such as Lihir Gold Mining, Kutubu and Porgera Joint Ventures. Import excise<br />
exemptions are the concessions sanctioned through Legislated Gazettal Notices such as<br />
import of vehicles by foreign projects owners.<br />
Nominal Revenue<br />
Nominal Revenue for the month of <strong>June</strong> was K226.50. This is K55.60 million or 33% higher<br />
than the projected receipts for <strong>2011</strong> Budget.<br />
The foregone revenue figure had soared higher because of exemptions and the trend is<br />
expected increase. <strong>Customs</strong> however intends to assess the trend and amicably apply relevant<br />
measures with appropriate recommendations in consultations with key government line<br />
agencies. The Government should not continue to lose such significant revenue while gaining<br />
minimal benefit from exemption schemes in terms of National Income particularly with respect<br />
to Gross Domestic Product.<br />
15<br />
Protecting Our Border<br />
Securing Our Future
Activity report for <strong>June</strong> 22 nd August, <strong>2011</strong><br />
Nominal Revenue for the month of March <strong>2011</strong> is illustrated by the following graph:<br />
Overall Performance<br />
In the month of <strong>June</strong> <strong>Customs</strong> had experienced a slight drop in its revenue collections. These<br />
are evidently shown in the shortfall collections on import and local excise outcomes which were<br />
discrete to improved <strong>Customs</strong> activities at the ports.<br />
Urgent Concern<br />
With insignificant effects in the development programs as a result of inadequacy the<br />
government has been consistently losing considerable revenue from tax concessions.<br />
The lost is not just millions but tens of millions over the months, as a result of such a<br />
precedent, revenue that would be very much necessary in development of the country. <br />
Any tax concession amendments for sub contractors in the future must be given appropriate<br />
deliberation especially the foreign sub-contractors as they will not always work in the interest<br />
of the people of <strong>PNG</strong>. Concessions going to giant off shore contractors are merely seeking to<br />
hike up their profit margins so their executives can enjoy lucrative bonuses at the expense of<br />
the people of <strong>PNG</strong>.<br />
16<br />
Protecting Our Border<br />
Securing Our Future