Kumul Petroleum News

Kumul Petroleum Holdings Ltd Managing Director, Wapu Sonk today responded to statement by Leader of the Opposition regarding alleged tax evasion by Kumul Petroleum Holdings Limited (KPHL). The “Tax Expense” figures quoted are correct and were reflected in the Financial Statements of the group in 2014 and 15, which were prepared and audited in accordance with international accounting and auditing standards by Ernst & Young and certified by the Auditor General office (AGO).

He said under the IFRS rules and standards all tax expenses are recognised at the time they arise regardless of when they are due for payment. Due to significant timing differences, the actual “Tax Payable” can vary materially from year to year, as was the case for the years in question.

In the case of KPHL, the corporate Taxes mostly relate to its interest in the PNG LNG Project, which was allowed accelerated depreciation for tax purposes under the terms negotiated between the Government and the PNGLNG Project Joint Venture Participants in 2009; hence, the difference in what was paid to IRC and what was recorded as “Tax Expense”.

KPHL has lodged all Tax Returns for all controlled entities in an accurate and timely fashion and has remitted all taxes payable before each due date. Should the Honourable Member wish to verify this he may confirm with the I.R.C. or check with the Office of the Auditor General (AGO) to verify the Audited accounts.

There is no secret that the tax take from the PNG LNG Project has been less than expected, however this is due to depressed Oil and LNG prices in the years 2014-2016 rather than any evasion or avoidance of Tax by Kumul Petroleum or the Project JV Partners.