Papua New Guinea Budget 2018
Papua New Guinea Budget Alert
The Budget has been set in a challenging economic environment. The Government has taken a positive view on the economy recovering but has employed fiscal discipline, reducing recurrent spending and investing in infrastructure, hospitals and education.
The theme of the Budget is “Review our Priorities, Refocus our Energies and Reinforce our Strengths”. The Budget is being handed down in difficult economic conditions. The Government has more to do with less and success will come down to how effectively it can implement the ambitious but necessary structural and operational reforms.
The Government seeks to employ fiscal discipline – by reducing recurrent spending and in nation building infrastructure, hospitals and education.
No new taxes have been introduced but instead there has been some adjusting of existing taxes and a focus on compliance, especially for large taxpayers.
Other important changes include:
- Removing the Training Levy and double tax deduction for training
- Increasing the threshold for tax compliance certificates (TCC) from K200, 000 to K500, 000. TCC is often required to transfer foreign funds outside PNG
- Clarifying the operation of the Foreign Contractor Withholding Tax (FCWT) regime
- Increasing the customs tariff on diesel
- Reintroducing the dividend rebate from 1 Jan 2018 for inter-company dividends
- Introducing concessional tax treatment for certain long service leave payments
- Clarification and adjustments to the taxation of the Resource Industry
- Outline of a medium-term revenue strategy including the introduction of a draft Tax Administration Bill and ongoing measures to both simplify the tax regimes and broaden the tax base.