A stunning announcement yesterday from none other than the government of Papua New Guinea has put a swathe of Sarawak based logging concerns on notice over allegations of criminal tax evasion and illegal plunder of a foreign country.
It means that whilst these same companies continue to operate above the law back home, where they effectively control key decision makers behind the GPS state government and are even subsidising a mosquito ‘opposition’ party, they at last face being held to account for their crimes elsewhere.
The authorised statement from the PNG’s top prosecutor, Commissioner General Sam Koim, goes directly to the point announcing the plan to audit 20 ‘delinquent’ logging companies in the country over suspected tax evasion – he says he plans to add more companies to the list.
Nearly all the operations in the country are known to be subsidiaries of some of Sarawak’s biggest hitters Rimbunan Hijau and WTK.
Samling also has a record of evading the law and penalties for breaking it in the state and these are the companies that are undoubtedly the ultimate culprits who, as the prosecutor points out, have “barely paid corporate tax” for years, declaring nothing but losses but nevertheless have continued to operate plundering millions of trees for decades.
“How can one continue to be in business if they make losses every year?” the prosecutor asks in the devastating statement “It is like they are telling us (tax office) that they are on a serious diet, yet they are putting on a lot of weight out there. We want to get to the bottom of this”. Indeed:
STATEMENT – IRC TURNS SPOTLIGHT ON LOGGING COMPANIES:
20 Logging Companies under Audit.
GST Refund Claims to be subjected to Comprehensive Audit.
The logging sector has been one of the delinquent sectors insofar as tax compliant is concerned. Not only that, they have been one of the most refunded sectors when it comes to GST refunds. This was revealed by the Commissioner General of the Internal Revenue Commission, Mr Sam Koim, in a statement released on Monday.
The IRC considers this as one of the high-risk sectors requiring attention and hence scaling up its compliance activities. The IRC revealed that around 20 logging companies are being audited. Based on the audit, several actions will be taken, including criminal prosecution.
“Over the years, logging companies have barely paid corporate income tax. The group salary and wages taxes they pay are very minuscule compared to the labour-intensive nature of their operations and the export income they derive. It is like they are telling us (tax office) that they are on a serious diet, yet they are putting on a lot of weight out there. We want to get to the bottom of this.” Mr Koim said.
The Commissioner General added that “Despite them not paying their fair share of taxes, they have been asserting their “exporter” status to claim and received a lot of GST refunds over the years.” The export of goods or services is considered as a zero-rated supply hence those are the exporting business such as log exporters, will not pass the GST to the ultimate consumers who are based overseas. This renders them to be in a credit position most of the time for refund purposes.
“But,” he pondered., “how can one continue to be in business if they make losses every year? How can one continue to be in business if their overheads far exceed their income?”
Mr Koim stated that “Given the evasive pattern of behaviour and the risks posed by the logging sector, all claims for GST refunds will be subjected to a comprehensive audit.
We are now turning the spotlight on this sector. We are also undertaking a comprehensive audit on 20 logging companies and will be adding some more to that list.”
Authorised for Release
Sam Koim, OBE
The rapacious plunder of logging companies based in Sarawak has as a matter of record spread well beyond Malaysian borders.
Samling, Rinbunan Hijau, WTK and Ta Ann have between them wreaked destruction across Indonesia, Africa, The Solomon Islands, South America, Australia and also in the once pristine islands of Papua New Guinea (PNG), where in 2019 Sarawak Report filmed an extensive report detailing the fury of the local people at what they see as colonialist abuse by the Malaysian logging and plantation companies who have bribed officials in order to plunder billions of dollars worth of timber and left the native communities destitute.
Sarawak Report has long advocated just such tough action against the Sarawak timber mafia who have left themselves exposed thanks to their greedy lies claiming negligible profits throughout their areas of operations whilst fuelling kickbacks to the likes of Taib Mahmud.
Whilst client politicians in Sarawak and elsewhere have become billionaires as a result, virtually no funds or benefit have been channelled back from these operations into the communities where they have logged and planted mega-crop plantations all at a supposed loss as far as the tax authorities have been concerned.
Then in 2018, at almost the same time that the Malaysians elected the PH government based on a reform and anti-corruption agenda a similar change of regime took place in PNG with the arrival of the government of James Marape pledged to gain reparations for the people.
Whereas PH soon sought to strike a deal with the Sarawak political mafia to be followed by GPS’s betrayal to become part of the PN backdoor coup, in PNG the new regime continues to pursue the tax agenda which exposes the criminal corruption behind the logging industry.
Filming community after community in 2019 Sarawak Report has demonstrated that the anger and rage amongst the native people of PNG mirrors almost exactly that of the Dayak people’s of Sarawak who have experienced near identical experiences at the hands of the same loggers who have exploited their political connections in the state.
Fraudulent and corrupted land grabs by companies masquerading behind local community turncoats and bribed officials have turned over millions of hectares in PNG for logging, as in Sarawak.
Manipulations of the law, ruthless legal actions and thuggish enforcement against community protests with the help of coopted police forces have been the story in PNG, all of which Sarawak locals have suffered also.
The same companies have worked from the same playbooks in both places. However, in PNG there is added fury amongst the people at the colonialist style state capture of their country over decades by these outsiders who promised to bring the usual roads, schools, homes and hospitals – namely development to the people, but in fact brought only destruction, impoverishment, slave wages and shocking working conditions for a handful of people in the country. A mirror image of Sarawak.
Time and again the people of PNG told Sarawak Report they want the Malaysians to “go back home”, give back their lands and pay the money they owe the country. Now, at last, official action is underway and the global spotlight will at last fall on the shameful alleged criminal record of Sarawak’s loggers, especially when it comes to giving back in tax.
Meanwhile, in Sarawak itself, as local people continue to desperately protest against the ongoing destruction and ongoing land grabs, the GPS/PN government continues to turn a blind eye and talk about ‘perimeter surveys’ instead of returning native rights and going after the tax evading companies who have been keeping the politicians in kickbacks for decades.
It is Sarawak’s shame and Malaysia’s sham and now PNG will show them up.