How to Calculate Import Duties and GST in PNG: A Practical Guide
Working out what you’ll pay at the PNG border isn’t complicated once you know the order of operations. This guide walks through customs value, tariff classification, duty, excise and GST, with a worked example.
In this guide
- Duties and taxes are calculated on the CIF value of the goods.
- The duty rate depends on the goods’ tariff classification; many goods are duty-free, while others attract significant rates.
- Excise applies to some goods, including vehicles, alcohol, tobacco and fuel.
- GST is charged at 10% on the CIF value plus duty and any excise.
The four building blocks
Every duty and tax calculation in PNG rests on four things:
- Customs value: what the goods are worth for duty purposes.
- Tariff classification: the HS code that determines the duty rate.
- Duty and excise rates: the percentages that apply to that classification.
- GST: 10%, calculated after duty and excise.
Step 1: work out the customs value
PNG calculates duties and taxes on a CIF basis: the cost of the goods, plus insurance and freight to the PNG port. If you bought on FOB or EXW terms, the freight and insurance you paid separately are added to reach the CIF value.
The starting point is the price actually paid for the goods, supported by the invoice and payment records. Customs looks closely at values that seem low, and at transactions between related companies. Under-declaring value is an offence that can lead to seizure and prosecution.
Step 2: classify the goods
Each product is classified under PNG’s Customs Tariff, which uses the international Harmonized System. The current tariff schedule is based on HS 2022. Classification decides the duty rate, so getting it right matters: a “part” and a complete machine, or a raw material and a finished product, can sit under very different codes.
Your broker proposes the classification, and Customs checks it when it assesses the entry. If you import the same products regularly, agree the classification with your broker once and keep a record.
Step 3: apply the import duty rate
Duty rates are set out in Schedule 1 of the Customs Tariff Act 1990. Many lines are listed as “Free”, and overall PNG’s tariffs are low on average: the World Trade Organization reported a simple average applied rate of 4.1% in 2022, with about 81% of non-agricultural tariff lines duty-free.
Averages hide the detail, though. Agricultural products averaged around 12.3%, and some processed foods and products that compete with local industry have attracted rates of 25%. The rate applied is the one in force on the day the import entry is lodged.
Step 4: add excise, if it applies
Some goods attract import excise on top of, or instead of, customs duty. Common examples include motor vehicles, alcohol, tobacco and fuel. For used vehicles, PNG Customs notes that import excise ranges from 20% to 120% of the import value, depending on engine size.
Step 5: calculate GST
Import GST is charged at 10% on most commercial imports. It’s calculated on the customs value plus duty and any excise, so it compounds on top of them.
GST-registered businesses can generally claim credits for GST paid on business inputs. Check with your accountant how import GST is treated in your situation.
A worked example
Here’s how the calculation fits together for a shipment bought on FOB terms. The duty rate is illustrative only.
| Item | Amount |
|---|---|
| Price of goods (FOB) | K80,000 |
| Sea freight | K12,000 |
| Marine insurance | K1,000 |
| CIF value | K93,000 |
| Import duty at 15% | K13,950 |
| Excise | Not applicable |
| GST base (CIF + duty) | K106,950 |
| GST at 10% | K10,695 |
| Total duty and GST | K24,645 |
Check the actual rate for your goods’ classification before you rely on any estimate.
Other costs at the border
Duties and GST aren’t the only charges. Budget too for:
- customs entry fees;
- customs brokerage;
- biosecurity inspection and treatment fees;
- terminal handling, port and shipping line charges;
- storage, if cargo isn’t collected promptly.
Go deeper
Concessions and exemptions
Some imports qualify for reduced rates or exemptions, for example under concessions for people relocating to PNG with used personal effects, or under agreements covering particular resource projects. Concessions have conditions and paperwork of their own, so confirm eligibility with your broker before you rely on one.
Frequently asked questions
Is PNG import duty calculated on FOB or CIF?
On CIF: the value of the goods plus freight and insurance to PNG.
What is the GST rate on imports into PNG?
Import GST is 10% on most commercial imports, calculated on the customs value plus duty and any excise.
Are most goods duty-free in PNG?
Many are. About 81% of non-agricultural tariff lines were duty-free in 2022, but some products, particularly certain foods, attract significant rates.
Which duty rate applies if rates change?
The rate in force on the day the import entry is lodged.
More on customs and import requirements
Sources
Philip Thomas
Philip is the lead author and editor at Phantom8. He writes practical guides to shipping freight into Papua New Guinea, with a focus on choosing the right port, clearing customs and planning the inland leg.
General information only. This guide is general in nature and isn’t legal, customs or logistics advice for your specific shipment. Port operations, road conditions, schedules and charges change, so confirm the details with your freight forwarder, transport operator or the relevant authority before you ship.