Papua New Guineans struggling with high inflation and the rising cost of basic goods may find some relief thanks to new tax measures introduced by the Marape-Rosso government.
The 2024 National Budget includes amendments to the Customs Tariff Act, eliminating customs duties and taxes on essential items used in manufacturing basic consumer products.
Under the leadership of David Towe, Chief Commissioner at PNG Customs Service, these new tax relief are aimed at reducing the cost of production and manufacturing of some basic consumer goods.
PNG Customs anticipates that the import tax relief and reduction in cost of production will be passed onto the consumers, when the shelf prices of the basic consumer goods in the local shops and retail outlets are cheaper for the benefit of our people who are consumers of these basic goods.
“This initiative by the Government is also intended to support the growth of our domestic manufacturing industry. These tax measures will see a number of key items used as intermediary goods or inputs, for our local manufacturing industry, to produce final products be given tax relief where the Import Duty rates have been reduced to Zero Duty. This will stimulate growth in local manufacturing and attract investment by reducing the cost of production for local manufacturers.
The list of the tax relief measures, being implemented by Customs, with the amendments to the Customs Tariff Act 1990 as per the 2024 National Budget, to assist our local manufacturing industry include;
-Import duty on soap noodles reduced from 20% to zero import duty
-Import duty on flexible intermediate bulk containers reduced from 10% to zero import duty
-Import duty on other packaging containers reduced from 10% to zero import duty
-Import duty on boneless meat for manufacturing pork luncheon meat reduced from 20% to zero import duty
-Import duty on margarine (shortening) used in manufacturing of breads and biscuits reduced from 25% to zero import duty
-Import duty on caps used for beverages and the like, reduced from 20% to zero import duty
-Import duty on mattress inner springs reduced from 10% to zero import duty.
PNG Customs is positive that these measures will also foster more investment and growth into the local manufacturing sector in PNG. We believe this is also in line with the 2023 National Manufacturing Policy, ‘to raise manufacturing sector GDP contribution to 20 per cent by 2050’.
“More growth and investment into the local manufacturing sector, is great for the economy as it generates growth and creates jobs. It is also intended that this initiative will stimulate further growth and contribute towards the achievement of economic growth aspirations set out in MTDP IV, to grow the local economy to K200 billion by 2030” Customers adds
While the long-term impact remains to be seen, these tax relief measures offer a glimmer of hope for Papua New Guineans facing struggling with high cost of living.
