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Papua N Guinea

8 July 2021

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Papua New Guinea Launches Small Business Tax for Individuals

The Papua New Guinea Internal Revenue Commission (IRC) launched the Small Business Tax (SBT) regime for individuals on 4 June 2021. Provisions for the SBT regime were first introduced in 2019 and subsequently revised with additional provisions as part of the Income Tax (2021 Budget) (Amendment) Act 2020.

Under the SBT regime, qualifying sole trader businesses are subject to SBT with different rates and timing depending on whether they are categorized as a micro or small business:

  • a business with annual turnover of less than PGK 60,000 is categorized as a micro-business and liable to pay a fixed tax amount of PGK 250.00 per year; and
  • a business with an annual turnover of more than PGK 60,000 and less than PGK 250,000 is defined as a small business and is liable to pay business tax of PGK 62.50 plus 2.0% of turnover above PGK 15,000 per quarter;

Where annual turnover exceeds PGK 250,000, the SBT regime may not be applied. Further, the SBT regime may not be applied for professional services, such as dental, legal, account, etc., and may not be applied by individuals registered or required to be registered for GST.

Additional information on the SBT regime is available on the IRC's SBT webpage, including application and return forms.

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