IRC Income Tax Brackets in Papua New Guinea for 2024

With a growing economy and strong demand for infrastructure, Papua New Guinea is focused on fostering and enabling an attractive business environment suitable for foreign direct investment. Strategically located in the Asia Pacific region, the country offers abundant natural resources and a favorable investment climate with a relatively low corporate tax rate. A range of direct and indirect tax-based incentives are provided including a 10-year exemption from tax available to certain new businesses which are established in specified rural development areas.

The tax system in Papua New Guinea is administered by the official tax body, the Internal Revenue Commission (IRC). The Income Tax Act 1959 provides guidance and support in the form of income tax tables for individuals and businesses. Taxpayers must familiarize themselves with these tax tables and the corresponding income tax brackets and income tax rates, for effective tax planning and to remain compliant with the tax laws of Papua New Guinea.

Here you will learn more about:

• headline tax rates
• personal income tax (PIT) rates
• corporate income tax (CIT) rates
• capital gains tax (CGT) rates
• withholding tax rates for residents and non-residents
• goods and services tax (GST) rates

Headline Tax Rates in Papua New Guinea

Personal Income Tax (PIT) Brackets for Individuals in Papua New Guinea for 2024

A resident individual who earns a salary or wage in Papua New Guinea must pay tax on that income at fortnightly rates, according to the Income Tax (Salary or Wages Tax) (Rates) (2024 Budget) (Amendment) Act. The tax deductible by the employer must be calculated according to the formulas outlined in Annexure 1 of the Act, failing which penalties of between PGK$500 and PGK$5,000 may be imposed.

Salaries or wages, under the Act, include the following:

• salary, wages, commissions, bonus, remuneration of any kind or allowances
• any remuneration by way of fees or other payment for professional services as an advisor or consultant
• under a contract that is wholly or substantially for the labor of the person involved
• by a company by way of remuneration to a director of that company

Certain payments are tax-exempt, namely, certain lump sum payments for superannuation and long service leave.

A non-resident individual is liable to pay PNG salary or wages tax, and these calculations are outlined in the IRC website.

Personal Income Tax (PIT) Rates for Resident Individuals

PIT rates for resident individuals in Papua New Guinea are tabulated below. 

Personal Income Tax (PIT) Rates for Non-Resident Individuals

PIT rates for non-resident individuals in Papua New Guinea are tabulated below. 

Personal Income Tax Rates for Small and Medium-Sized Enterprises (SMEs)

The 2020 Budget brought about changes, introducing a new SME tax regime which applies to individuals. This regime excludes employment income and income from professional services. Tax is calculated as follows:

• 2% of turnover where an SME derives less than PGK$250,000 per year or
• PGK$400 annual fee for a business with a turnover of less than PGK$50,000

Once a taxpayer elects out of the SME tax regime or exceeds the threshold, they will be taxed as an individual at marginal tax rates.

Personal Income Tax Due Dates

Corporate Income Tax (CIT) Rates in Papua New Guinea for 2024

Corporate Income Tax (CIT) rates in Papua New Guinea are tabulated below.

Corporate Income Tax Due Dates

Capital Gains Tax (CGT) in Papua New Guinea

There is currently no Capital Gains Tax (CGT) regime in Papua New Guinea.

Withholding Tax Rates for Residents and Non-Residents in Papua New Guinea

In general, withholding tax (WHT) in Papua New Guinea is levied on residents and non-residents. Different rates may apply depending on the source of income, such as dividends, interest or royalties. However, certain local laws provide exemptions from WHT for dividends and interest in specified circumstances.

Papua New Guinea is also signatory to several double taxation treaties (DTTs) which may vary WHT rates. A taxpayer may benefit from the provisions of these DTTs.

Goods and Services Tax (GST) Rate in Papua New Guinea

The standard GST in Papua New Guinea is 10% while exported goods and services are zero rated.