The investment incentives currently available are designed primarily to encourage the development of industries that are considered desirable for the long-term economic development of Papua New Guinea or specific underdeveloped regions within the country and are as follows:
Loans to industry
Investment guarantees
Tax concessions
Accelerated depreciation rates are available for new manufacturing and agricultural plant, generous deductions are available for capital expenditure on land used for primary production and accelerated deductions are available for mining and petroleum companies. For more details, refer to our /extweb/service.nsf/docid/efee1aa2f6b3a99485256fbe0060ff96 " target="_blank">Global Tax Solutions page, or contact us.
Rural development incentives
A ten-year exemption from tax is available where certain new businesses are established in specified rural development areas. Businesses, resident or non-resident, engaged in the following activities qualify for this exemption:
Agricultural product of any kind
Manufacturing of any kind
Construction
Transport, storage and communications
Real estate
Business services
Provision of accommodation, motels or hotels.
The following has been specified as rural development areas:
Central province – Goilala
Enga province – Kandep, Lagalp, Wabag, Wapenamunda
Gulf province – Kaintiba, Kikori
Eastern Highlands province – Henganofi, Lufa, Okapa, Wonenave
Southern Highlands province – Jimi, Tambal
Madang province – Bogia, Rai Coast, Ramu
Milne Bay province – Losula, Rabaraba
Morobe province – Finschaffen, Kabwum, Kaiapit, Menyamya, Mumeng
East New Britain province – Pomio
West New Britain province – Kandrian
East Sepik province – Ambuti, Angoram, Lumi, Maprik
West Sepik province – Amanab, Nuku, Telefomin
Simbu province – Gumine, Karimui.
The exemption does not apply to businesses in areas in which a special mining lease or a petroleum development license is granted.
Export incentive for manuafacturers
Business that commence exporting qualifying goods manufactured by them in Papua New Guinea are exempt from income tax on the profits derived from those sales for the first three complete years. For the following four years the profit derived from the excess of export sales over the average export sales of the three previous years is exempt from income tax. The list of qualifying goods include, amongst others, motor vehicles, matches, paint, refined petroleum, soaps, wooden furniture, dairy products, flour, chopsticks, artifacts, clothing and manufactured textiles and jewellery.
Wages subsidy
