The APNGBC hosted the third in our series of Bisnis Toktok webinars on 4 December to unpack the tax changes arising from Papua New Guinea’s 2026 National Budget, with expert presentations from Deloitte’s Andrew Harris and Corrs Chambers Westgarth’s Michael Carroll. The session outlined how the new Income Tax Act 2025 (ITA 2025) and the long-delayed Tax Administration Act 2017 (TAA) will reshape compliance, reporting, and enforcement from 1 January 2026.
The ITA 2025 introduces major shifts affecting foreign contractors, employment taxes, asset depreciation, and capital gains treatment. The removal of Foreign Contractor Withholding Tax means foreign firms with a permanent establishment must now lodge full corporate returns and pay 30% tax plus 15% repatriated profits tax. Salary packaging rules are tightened, with only school fees, home-leave fares, and certain accommodation benefits permitted, supported by new valuation rules for vehicles, medical benefits, and loans. The Act also brings new asset categories, depreciation pooling rules, and limited capital gains tax on resource rights.
Changes to indirect taxes include an increased diesel excise, an expanded 0.5% petroleum levy, and extended zero-rating of essential GST items. The Infrastructure Tax Credit Scheme cap rises from 2% to 3%, with a dedicated portion for Bougainville projects.
The TAA 2017 represents the most significant administrative change. The IRC gains strengthened recovery powers, including tax charges over property, administrative distress actions, and temporary closure of businesses for serious non-compliance. Information-gathering powers increase, audit activity is expected to expand, and disputes will face tighter timelines with full late-payment penalties required before appeals proceed.
Across the board, businesses will need to update payroll systems, review contracts, reassess withholding obligations, and prepare for more assertive enforcement. Both presenters noted that transitional uncertainty is likely given IRC resourcing pressures and the breadth of change, underscoring the need for early preparation and close attention to new regulatory guidance.
