Papua New Guinea

Individual - Tax administration

Last reviewed - 17 December 2019

Taxable period

The tax year is generally the period 1 January to 31 December.

Tax returns

Taxpayers who have only employment income and are fully taxed at source by virtue of salary or wages tax need not complete an annual income tax return. Taxpayers with other income, such as interest, dividends, rental income, trust distribution, or partnership income, must disclose this in an annual income tax return. Tax payable is generally calculated with reference to graduated tax rates (see the Taxes on personal income section for more information). Income tax is levied by the IRC and not by the states or provinces.

Annual income tax returns are generally due for lodgement by 30 June of the following year under most tax agent lodgement programs. Where a tax agent is not used, the return is due to be lodged by 28 February of the following year. Each individual is assessed separately. There is no joint assessment for husbands and wives.

Papua New Guinea operates on a full assessment basis, and, where required, individuals lodge an annual income tax return showing the calculation of taxable income for the year. In addition, the return must provide detailed disclosures in relation to income derived and expenses incurred during the year of income.

Payment of tax

Salary or wages income is subject to salary or wages tax and is subject to fortnightly assessment of tax, regardless of the employer's actual pay period. The tax assessed is a final tax and is determined by reference to standard rate tables. Employer's are required to remit salary or wages tax deducted from employee salary or wage payments on a monthly basis.

Provisional tax is levied on non-salary or wages income to ensure that, as far as possible, all income is taxed in the year in which it is earned. Every taxpayer who earns in excess of PGK 100 from non-salary or wages sources has a liability to pay provisional tax. Provisional tax is normally calculated as being equal to the income tax assessed for the preceding year but can be varied to a lesser amount if an application is lodged with the IRC prior to the due date for payment. The tax is payable no earlier than 30 September of the year of income.

Where an individual is served with a notice of assessment to income tax, any tax payable is due within 30 days of the date of service of the notice.