Taxes in Papua New Guinea

The Income Tax Act 2025 applies from 1 January 2026 and replaces the Income Tax Act 1959 and earlier rating laws. The Tax Administration Act 2017 provides the main administrative framework. The Department of Treasury develops tax policy and budget measures, the National Parliament makes tax laws, and the IRC manages registration, assessments, audits, collections and refunds. A Taxpayer Identification Number (TIN) is generally a nine-digit identifier used for tax administration. The tax year normally follows the calendar year. Individuals, partnerships and trusts generally file within three months after year-end, while companies generally file within six months. A company using a registered tax agent may generally have nine months, subject to the applicable filing rules. Salary-only individuals whose employment income was correctly withheld will generally not need an annual return under section 136. Employers deduct Salary and Wages Tax every two weeks and usually remit it by the seventh day of the following month. For resident individuals, taxable income up to PGK 20,000 is taxed at 0%; the bands above PGK 20,000 rise through 30%, 35%, 40% and 42%, with income above PGK 250,000 taxed at 42%. Non-resident individual rates begin at 22% on income up to PGK 20,000 and then use the higher bands. The general company income-tax rate is 30%. Commercial banks have a 35% rate on profit up to PGK 300 million from 1 January 2026 and a higher temporary rate above that amount. GST is normally charged at 10% on taxable goods, services and imports. A business with turnover of PGK 250,000 or more generally falls within GST registration requirements. GST payable is normally output tax less eligible input credits, and the G1 return is usually due by the 21st day of the following month. The Commissioner may approve a taxable period of up to three months for a business with turnover of no more than PGK 1.5 million. The 2026 Budget provides zero-rating for 13 listed essential goods, including rice, flour, tinned fish, chicken, cooking oil, soap, women’s hygiene products and baby diapers, until 31 December 2026. A proposed fuel-GST change was not confirmed as enacted law in the available research and should not be treated as current law without confirmation. A qualifying sole trader may use the Small Business Tax (SBT) instead of the regular income-tax rules when the business operates only in Papua New Guinea, is not GST-registered, is not otherwise subject to regulated income tax and has annual turnover of no more than PGK 250,000. The IRC guide states a fixed annual amount of PGK 250 when annual turnover is below PGK 60,000, while the quarterly calculation is PGK 62.50 plus 2% of quarterly turnover above PGK 15,000. The stated quarterly deadlines are 28 April, 28 July, 28 October and 28 January, with the annual return due on 28 January. Businesses should verify current forms and filing functions in ITAS because some IRC guidance predates the 2026 legislative changes. Withholding can apply to payments such as dividends, interest, business income, royalties, capital gains, non-resident services and resource-related amounts. Examples include 15% withholding on resident dividends and resident interest, 10% on some business-income payments, and 15% on many interest, technical-fee and natural-resource payments. The correct rate depends on the payment type, recipient and applicable law or treaty. Resource and petroleum projects can also face Mineral and Petroleum Tax, Additional Profits Tax at 30%, project-specific fiscal-stability rules and a National Petroleum Authority levy of 0.5% of gross petroleum revenue from 1 January 2026. Importers file electronically through ASYCUDA World, normally using a licensed customs broker and Form 15. An import declaration may be lodged up to five working days before arrival or, at most, five working days after arrival. A simplified declaration can apply where dutiable value is no more than PGK 5,000, and goods valued at no more than PGK 250 may be duty-free under the applicable rules. The Notice of Assessment can include customs duty, excise and import GST. Payment is electronic or by EFTPOS, not cash, and import records should generally be kept for at least five years. Customs duties use the tariff rate applying on the entry-lodgement date. Incorrect declarations can lead to additional duties and taxes of 50% to 200%, seizure or prosecution. Customs delay can add 8% for each five-day period plus a penalty. Import-duty, import-excise or import-GST relief requires a legal instrument such as a Gazette Notice, project agreement or trade agreement. Some exemptions require National Executive Council approval and Head-of-State endorsement. A taxpayer may challenge an assessment or seek a refund where the statutory conditions and evidence are satisfied. A tax exemption exists only when a legal instrument provides it; there is no automatic local tax exemption. A non-resident with a permanent establishment in Papua New Guinea may need to report repatriated profit. A resident payer or PNG permanent establishment can act as withholding agent for PNG-source income paid to a non-resident. Papua New Guinea has tax treaties with countries including Australia, China, New Zealand, Indonesia, Korea, Singapore, Canada, the United Kingdom, Malaysia and Fiji. The Mutual Agreement Procedure (MAP), handled for Papua New Guinea by the Commissioner General of Internal Revenue, addresses treaty interpretation and double-taxation disputes. It does not create general freedom from tax.