FAQ

Bank accounts and TIN Q&A
Are there any exemptions from stamp duty for people buying their first home?

Yes the first home purchased for personal occupation is exempted if the value the property is under K210,000.00. Concessional rates apply if the property is over K210,000.00

If I am having trouble paying my tax debts can I pay by installments?

Yes, provided early contact is made with the Debt Management Section, so an arrangement can be approved that is suitable with both IRC and the taxpayer. Penalties may be imposed for late payment.

Can I split payment to account for labour and materials so that I stay under the k 500.00 limit?

No, a contract let for a service that requires the payee to also supply materials is considered to be a single contract.

Does the Income Reporting system apply to persons who only supply goods?

No, as no work is performed the payment is not an eligible payment.

Does the system apply to persons who supply goods for sale either wholesale or retail sales?

No, as no work is performed the payment is not an eligible payment.

My clients insist on a certificate of compliance yet I am not subject to the income reporting system, what can I do?

You may either apply, for a certificate of compliance and supply that to them, or ask for a determination that your company is in fact exempt from the system. Such requests for exemption are to be made in writing to the address below.

Is there any justification as to why SBT is imposed?

Every business conducted in PNG is subject to the income tax regime. Under this regime tax requirements regardless of the size of the business is the same.

The small business tax was introduced providing a regime that is simple and suits the micro and small businesses. Small businesses who are eligible for tax under small business tax can chose to stay in the income tax regime.

In addition,  many small businesses are not contributing to national building by paying their fair share of tax. Tax is borne by  15% -20%  of PNG’s population mainly through employee taxes to fund goods and services provided by the government for all citizens.

How many informal small businesses are you going to attract? As many as possible

As many as possible.  Taxes are not voluntary payments. It is law that businesses must pay taxes at the rates prescribed in the tax law

Should SBT taxpayers lodge salary and wage remittances every month during the year?

A sole trader who engages the services of others and pays them a wage must keep a wage register.

  • Name of casual/employee
  • Date of Payment
  • Amount Paid
  • Tax deducted
  • Net Pay

A salary/wages remittance must be lodged with the IRC every month even where no salary or wages tax is deducted as the wages may below the tax threshold

Do I still pay tax even if there is no business in one of the quarter in SBT small business?

Yes.  All you pay is K62.50 in one quarter.

SBT is more like a subscription fee.  K250 is the annual subscription fee and divided by 4 quarters you pay K62.50 for each quarter. Should your turnover in one year go over K60,000, the excess amount will be taxed at 2%

Will taxpayers above K250 000 turnover have any incentive as the small business taxpayer have their incentive of paying very low tax only paying 2%. Yes to be considered later.

Sole traders with above K250,000 annual turnover  will remain under income tax regime.

Under the income tax regime, tax is charged on the taxable income i.e. business related expenses and loss are deducted from the turnover to arrive at the taxable income.  Is the taxable income is beloe K12,500 then there is no tax charged

Is there a list that shows which businesses will be subject to SBT?

Any business  other than professional services  conducted by a sole trader that satisfies the SBT conditions will be subject to small business tax. Also, investment income being dividends, interest and rental income are not considered as business income

What is the justification in Projecting Revenue from SBT with existing SMEs'?

There is no rustication as yet.  However, the initiative is to get as much small businesses into the tax net to pay their fair share of taxes.  The incentive is that small business should worry less on tax and more on growing their business.

With the roll out of the SBT, how many informal small businesses are you going to attract?

As many as possible

Can you offset salary and wages tax against small business tax paid?

No, you cannot

Is there any incentive for the SBT taxpayers that pay the GST component on goods and services used?

No, small business taxpayer becomes the final consumer of the goods and services like everybody else

Is there a list which shows which businesses will be subject to SBT?

Currently, IRC does not have a list now but will look at providing one

PUBLIC NOTICES

Notice of Management Fee Withholding Tax - [more]

Public Notice: PRWT – Prescribed Royalty Withholding Tax - [more]

Taxpayer Public Notice – Management Fee Withholding Tax - [more]

Reinvigorating Certificate of Compliance - [more]

General Notice to Suppliers of IRC - [more]

GLOBAL FORUM: PNG Peer Review Report on the Exchange of Information on Request - [more]

PUBLIC NOTICE: ISSUANCE OF A SECTION 65A NOTICE - [more]

Appointment for Acting Commissioner of Tax - [more]

Small gains to Report 14.5.2020 - [more]

MOU between IRC and IPA Media Release - [more]