Papua New Guinea’s Prime Minister James Marape announced tax reforms on 7 February 2025. These tax reforms will take effect once Papua New Guinea’s economy reaches a K150 billion milestone, a target expected to be achieved within the next three to four years. The reforms include cuts to corporate and personal income tax.
The Prime Minister has also invited business input on the reforms. These tax reform strategies aim to foster investment, increase consumer spending, and drive local industry growth.
The Prime Minister emphasised that these changes will create a business-friendly environment, ensuring that economic expansion benefits both investors and citizens.
Prime Minister Marape outlined key tax initiatives that will come into effect once PNG reaches the K150 billion economic threshold:
- Lowering corporate tax to encourage business expansion and attract further investment.
- Reducing personal income tax to increase disposable income and boost domestic consumption.
- Implementing stricter capital outflow regulations to ensure funds are reinvested locally rather than leaving the country.
“These tax reductions will create the conditions necessary for businesses to thrive, ensuring that investment remains in Papua New Guinea and continues to support employment, infrastructure, and industry growth,” said Prime Minister Marape.
To further strengthen PNG’s economic position, the government is focusing on Special Economic Zones (SEZs), including a tax-free business hub in Manus Province, designed to attract regional trade, investment, and industrial development.
Prime Minister Marape also called upon leading business organisations, including the PNG Chamber of Commerce, the PNG Business Council, the Manufacturers Council, and the Chamber of Resources and Energy, to collaborate with the government in identifying growth opportunities and shaping investor-friendly policies.
He highlighted import replacement and local manufacturing as key government priorities, urging multinational and domestic firms such as Trukai Industries and those in the food sector to invest in local production to reduce PNG’s dependence on imports.
The government is committed to:
- Reducing bureaucratic barriers to make investment easier and more efficient.
- Encouraging foreign and domestic businesses to scale their operations in PNG.
- Developing an industrial and manufacturing base to create jobs and reduce reliance on imports.
