Customs and Excise

Customs and Excise

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The Internal Revenue Commission uses the Harmonised Commodity Description and Coding System (H S Tariff).

Import Duties
All importers of goods are equally liable to import duty, irrespective of the country of origin. The same tariff is therefore applied to all countries.

All import and export duties are specified under the Customs Tariff Act 1990 but there are provisions to allow for exemptions or reductions to import and export duties after special consultants have investigated the warranting of such action.

The Government has been concerned at past excessive levels of protection for some domestic producers. Tariff reforms began with the 1996 National Budget. It was announced that the reforms will lead to significantly lower tariff bands for raw materials and inputs, intermediate products and final products, and a moderate protective tariff rate.

This tarrif reform exercise is allied with the introduction of the Value Added Tax.

The tariff reforms will take place over the next three years. The main policies include:

·	Maintain general imports at 11% until the introduction of a VAT;

·	Emphasise the duty drawback system for exporters;

·	Phased reductions from 8% to 5% in 1997 for a range of business inputs;

·	Maintain a 40% protective rate for viable infant industries;

·	Move from non-tariff protection to the 40% protective rate;

Customs duties are imposed on most imports other than rice (part of the Papua New Guinea's staple diet), medical supplies and certain newspapers, magazines and children's books. Also exempt from import duties are certain specified goods, including:

·	All aircraft, helicopters, spacecraft, air-cushion vehicles, hovercrafts, aircraft engines and all other parts specifically designed when purchased and imported by Papua New Guinea registered companies, holding PNG airline operator's licence.

All cruise ships, excursion boats, ferry boats, tankers, refrigerated vessels, other vessels for the transport of goods, hovercrafts, fishing vessels, tugs, dredgers, floating or drilling platforms (except pleasure yachts and sports boats) when purchased and imported by Papua New Guinea registered shipping companies;

·	Marine propulsion engines and outboard motors up to 100hp when purchased and imported by Papua New Guinea registered companies.

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