Prices of imported goods hiked to give local production more protection

The recent price increase on fuel and consumer items was done to boost local production and encourage people to buy Papua New Guinea-made products, Treasurer Charles Able says.
Abel said the changes in government excise duties are for imported items which have equivalents produced locally.
He said this will encourage people to buy locally made products.
He said the decision was based on wide-ranging meetings with the extractive industry and consumer industries that produce items such as coconut oil, soap, dairy products and tinned fish.
“This is not so much as a government revenue-driving measure but one that is focused on supporting local production and building a sustainable broad-based economy,” he said.
He said out of thousands of items in the tariff code, only about 230 are affected by the increase in excise duties. These are overseas-made items which have equivalents made locally.
“Seventy per cent of the changes that we made have only a 5 per cent increase,” he said.
Abel said for fuel the excise duty is less than 4 per cent change. He said it is a one-off change.
“The price of diesel has gone up by seven toea. That is the net effect of that tariff,” Abel said.
An excise tax is an indirect tax charged on the sale of a particular good. Indirect means the tax is not directly paid by an individual consumer, instead, the Internal Revenue Commission (IRC) levies the tax on the producer or merchant, who passes the tax onto the consumer by including it in the price.
Able said there is a 25 per cent excise duty on certain milk items.
“My understanding of this change is that it will only affect the production of fresh milk.
“It won’t affect things like ice cream and yogurt and longlife milk.”
This initiative is intended to give some support to the local dairy farm at Ilimo, just outside of Port Moresby, he said.