PNG blamed for company’s unpaid taxes

A Wellington company will be liquidated after failing to recover more than $300,000 owed to it by the Papua New Guinea (PNG) Government.

Evaluation Consult was put into liquidation on March 24 following an application by the Inland Revenue Department in relation to more than $685,000 in unpaid taxes.

In a High Court judgment, associate judge Warwick Smith said the money owed to Inland Revenue was ‘‘now very substantial’’ and there appeared to be ‘‘no hope’’ of paying the debt within a reasonable timeframe.

Evaluation won a court case in 2015 to recover $600,000 from the PNG Government for work on a sustainable development policy for the government sector.

The firm was approached in 2014 to support a development plan. However, in December 2015 Evaluation pulled out of the project because the PNG Government had stopped paying its invoices.

Since then, the company has been trying to claw back the money it is owed.

After winning a court case to recover the money, the company has been backed by officials from the Ministry of Foreign Affairs and Trade, while Foreign Minister Murray McCully raised the issue on a visit to Port Moresby.

As of March 2017, Evaluation had managed to get $315,000 back.

‘‘[However], there was a problem with the PNG money … as under the laws of PNG, money could only be remitted to New Zealand at the rate of approximately $4500 per day, and would take a considerable time for Evaluation to clear the arrears using the PNG funds,’’ the judge’s decision said.

On March 21, the company asked for an adjournment to try to pay Inland Revenue the $315,000 held by PNG.

‘‘If such a payment were made, it would be sufficient to clear the entire core tax debt and interest; however, [the] penalties, which I am told now amounts to approximately $309,000, could not be paid,’’ the judge said.

‘‘Evaluation might now be back on track and have a viable business looking forward, but the penalties due to the [Inland Revenue] Commissioner are now very substantial. Evaluation would appear to have no hope of paying the penalties within any reasonable timeframe.’’

Company co-director Kate Averill, who led the PNG project, insisted the business was ‘‘viable and profitable’’, and argued no good purpose would be served by liquidating the company and putting 10 staff out of work.

She said the company had grown significantly over the past five years and admitted there were ‘‘cashflow problems’’, exacerbated by the non-payment of the PNG debt.

Numerous proposals were put to Inland Revenue – one of which was agreed on principal.

However, after failing to meet part of the agreement, Inland Revenue declined the final proposal and filed liquidation proceedings.

A company spokeswoman declined to comment.