Excise

Corporate Services Trade Tariff & Trade, Excise & Valuation Excise

What is Excise?

Excise is a tax or levy charged on certain goods and products that have been legally declared as Excisable Products through an Act of Parliament. This tax applies to goods that are:

  • Locally manufactured in Papua New Guinea, or
  • Imported into Papua New Guinea

ℹ️Terminology:
Excise tax on locally manufactured goods is called Local Excise Duty. Excise tax on imported excisable goods is called Import Excise Duty.

Excisable Products

The main excisable products currently manufactured locally in PNG are:

Product Category Examples
Beer All types of beer and malt beverages
Tobacco Products Cigarettes, cigars, loose tobacco
Spirituous Liquors Spirits, whisky, rum, gin, vodka
Wine Products Wine, fortified wine, cider
Petroleum Products Fuel, diesel, kerosene, refined petroleum

ℹ️ These same products, when imported, are also subject to Import Excise Duty.

Legal Framework and Administration

Administering Authority

The Chief Commissioner of Customs has the power to administer and control the manufacture of excisable products in PNG and the collection of excise duties.

Legal Basis

The Excise Act (and its regulations) governs the administration of excise.

Rate Setting

The Excise Tariff Act is amended annually during budget sessions to reflect new rates for the fiscal year.

Registration and Licensing for Manufacturers

All local manufacturers of excisable goods must be registered with PNG Customs and hold a valid license to operate such facilities.

  • All manufacturers must register with PNG Customs.
  • A license fee must be paid to operate a manufacturing facility.
  • Licenses must be renewed every year on or before the 10th working day of the year.
  • Customs requires a security for the excise duty in the form of a Bank Guarantee. The amount is determined by the Chief Commissioner of Customs.

Excise Rates and Adjustments

How are rates adjusted?

For locally produced excisable goods, rates are adjusted or increased every six months based on The lesser of:

  • 2.5%, or
  • The CPI movement expressed as a percentage
Adjustment Date New Rates Apply
1 June First semi-annual adjustment
1 December Second semi-annual adjustment

Annual Legislative Update

The Excise Tariff Act is amended each year during budget sessions to reflect the new rates for the fiscal year.

ℹ️ Current Rates: The current excise rates can be found in Schedule 1 of the Excise Tariff (Amendment) Act for the relevant year.

Lodgment of Local Excise Declarations

Declaration Deadline

Local Excise Declarations must be lodged within five clear working days after sales or delivery of the goods.

Penalty for Late Lodgment

Late lodgment will incur penalties as stipulated in Section 39 of the Excise Act 1956.

Weekly Excise Duty Payments

Payment Schedule

Under Excise Regulation 82, all payments of excise duty on locally manufactured excisable products must be made:

Payment Frequency Weekly
Due Date No later than the 5th working day of the week succeeding any working week.
Working Week Definition Monday to Saturday (in which any sales of such products were made).

Payment Upon Assessment

Payment Period Excise duties must be paid within five clear working days of an assessment notice being issued.
Late Payment Penalty If payment is not made within five days, a late payment penalty interest of 8% will be applied for each 5-day period (or part thereof) that the payment is overdue.
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