A summary of tax incentives available in Papua New Guinea, including deductions, tax holidays, depreciations and tax credits. Provided by KPMG’s Port Moresby office.

A majority of the tax incentives and concessions which might be relevant or important to intending investors and business operations in PNG have been dealt with in the various sections above. However, for ease of reference, a number of these are now summarised in the list that follows.

In many cases availability of these incentives will depend on the entity claiming them meeting certain qualifying conditions or obtaining formal approval in advance from the IRC. In this regard, it is recommended that entities interested in getting full details for any of these incentives, contact one of the four major international tax and accounting firms operating in PNG.

Such tax incentives include:

• A double deduction for qualifying export market development expenditure for manufacturers and tourism operators
• A double deduction for staff training of PNG citizen employees
• A 10-year tax holiday for income from certain active business activities commenced in prescribed rural development areas within PNG (of which there are many)
• Up to 100% annual depreciation possible for plant and equipment used in certain industrial, manufacturing or agriculture activities
• Infrastructure tax credits, where expenditure on approved infrastructure projects by resource companies, primary producers and tourism operators qualifies as a credit against tax payable, at varying rates up to a maximum of 1.5% of assessable income
• Tax deductions for gifts to accredited political parties, sporting bodies and prescribed charitable bodies
• Double deductions for donations to specific bodies or funds set up for purposes such as law and order, national or world expos, sporting contests and global conferences.

This guide to Papua New Guinea’s tax system is produced by KPMG’s Papua New Guinea office and is reproduced here with permission.