THE 2018 Budget has introduced a number of revenue policy measures. They are:
- To strengthen the Internal Revenue Commission consistent with the MTRS with the establishment of a Large Taxpayers Office to focus on increased compliance of large taxpayers and, for PNG Customs to engineer a concerted lift in compliance and collections;
- to remove the training levy and double deduction for training;
- the suspension of the last phase of the current tariff reduction program and an increase in import tariffs on refined petroleum products and other imported products that will ease the adjustment on domestic manufacturing;
- an increase in the diesel excise to 23 toea from 10 toea to align rates more with petrol excises;
- the realignment of the export duty of unprocessed old- growth logs to capture resource rents at varying log species;
- a clarification in distinguishing agricultural/primary production to logging or timber operations to minimise abuse and to save revenue leakages;
- the removal of the Goods and Service Tax zero-rated status for educational institutions to address abuse;
- a clarification on the definition of resource company in the Goods and Services Tax Act 2003 to ensure that only operating licence holders benefit from GST zero rated status;
- aligning the taxation treatment of royalties in the resource sector to be a deduction rather than a tax offset; and,
- A “pay now litigate later” policy to improve compliance and increase receipts.
These revenue measures are expected to amount to an additional K755 million from the increased compliance measures and K204 million from the changes to tax measures in 2018.