Debt Management

Corporate Services Trade Duty Payments Debt Management

What is Debt Management?

Debt Management is a function within PNG Customs responsible for managing debts owed to the Papua New Guinea Customs Service.
Main Objective: To ensure debts are collected in a timely manner, thus increasing revenue collections and reducing debts.

Types of Customs Debts

The types of debts currently existing in PNG Customs are:

Post Clearance Audit (PCA) Cases Debts established through audit activities (e.g., misclassification of goods).
Enforcement Cases Debts established through enforcement activities (e.g., penalties for breaches).
Dishonoured Cheques Payments made by cheque that are not honoured by the bank.

Post Clearance Audit (PCA) Cases

How PCA Debts Are Established

The Post Clearance Audit section identifies cases through audit activities, audits them, and establishes debts. Typical cases involve misclassifications in the lodgement of Customs Entries.

Penalty Rate: An Administrative Penalty of 50% – 200% under the Customs Act (Chapter 101) is applied, depending on the nature of the case.

Recovery Actions at Regional PCA Level

After the conclusion of the audit, general recovery actions are taken at the Regional PCA Sections:

Issuing of Post Notes 31 days
First Demand Letter 21 days
Second Demand Letter 14 days
Final Demand Letter 7 days
If Payment is Made

Once the payment is made the file is closed.

If Payment is NOT Made
Consequence Details
Late Payment Interest 8% per 5 days is calculated and added onto the initial debt.
Referral The case is referred to Debt Management for issuing of a garnishee under Section 191AA of the Customs Act.
Recovery Actions by Debt Management

Debt Management registers the cases and reviews the files. The types of recovery actions taken include:

Action Details
Issue Garnishee Notices Sent to all commercial banks.
Review Cases After 14 days, review and resubmit garnishee notices if payment is not received.
Further Recovery Actions If payment is still not received, Debt Management may recommend:
  • Making various searches to identify the debtor
  • Placing travel restrictions
  • Placing a stop on processing the client's future import/export entries
  • Referring cases to Legal Services for legal action
  • Writing to the Public Solicitor if a deceased taxpayer has left an estate
  • Making a submission to the Secretary Department of Finance to write off debt as irrecoverable if the recovery avenue is statute barred

Enforcement Cases

How Enforcement Debts Are Established

The PNG Customs Enforcement Division also establishes debts through its enforcement activities.
  1. Initial Recovery: General recovery actions are taken at the Enforcement Division level.
  2. Referral: If debts are not paid, cases are referred to Debt Management for garnishee notices.
  3. Debt Management Action: Debt Management applies the same recovery actions as outlined for PCA cases.

Dishonoured Cheques

Context

With the introduction of the new payment system, PNG Customs Service will no longer receive bad payments. However, should any dishonours occur under unlikely circumstances, Debt Management will apply the following recovery actions:

Action Timeframe / Details
First Demand Letter 14 days
Second Demand Letter 7 days
Issue Garnishee Notices Sent to all commercial banks.
Review Cases After 14 days, review and resubmit garnishee notices if payment is not received.
Further Recovery Actions If payment is still not received, case is reviewed again and other recovery actions are recommended (as listed under PCA cases).

Modes of Payment for Debt Repayment

With the introduction of the new payment system, PNG Customs no longer accepts cash and cheque payments. Clients wishing to repay debt are encouraged to use the following methods:

EFTPOS Available at all Customs Cashiers Offices. All cards as per signage at the cashier's counter are accepted.
Electronic Funds Transfer (EFT) Interbank transfer from your account to PNG Customs Account.
Prepayment Pay a certain amount in advance (by bank cheque) to create a credit in the ASYCUDA System.

EFTPOS Fees

Transaction Range Fee
K0.00 – K50.00 50 toea
K51.00 – K1,999.00 1% (e.g., K165 = K1.65)
K2,000.00 and above K20.00 flat
(e.g., K5,500 = K20.00, K10,000 = K20.00, K20,000 = K20.00)

✏️ Note: Fees are charged by BSP.

Convenience: This option is convenient for one-time importers/exporters or SMEs, and for any assessment up to K15,000.00.

ℹ️ Important: You may need to liaise with your bank to increase the threshold on your account, as EFTPOS transactions are limited to a certain amount depending on the type of card.

Electronic Funds Transfer (EFT) – Bank Details

As part of the PNG Customs Modernization Plan, Customs will stop accepting payments directly from importers/exporters and brokers/agents. You are required to arrange with your respective banks to do an Interbank Transfer (EFT) to repay debts.

Account Name Customs Revenue Administration Subsidiary
Account Number 7002820566
Account Type Cheque Account
Bank Bank of South Pacific (BSP)
Branch Port Moresby
BSP Number 088 294
SWIFTCODE BOSPPGPM

✏️ Note: The above mode of payments can be used by clients to repay debts as well as all other Customs duties.

Prepayment

This is a method of payment whereby the client pays in advance a certain amount of money (by Bank Cheque).

How It Works

The total amount is shown as a credit in the ASYCUDA System. As you lodge entries, the total balance decreases until the advance is depleted, at which point you can top up again.

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