What You Need to Know About Papua New Guinea Sales Tax (GST)

Papua New Guinea keeps its GST straightforward: a single 10% rate on most goods and services, with zero-rating for exports and exemptions for essentials like healthcare and education. Registration kicks in once your annual turnover hits PGK 250,000, and from that point you file monthly with the Internal Revenue Commission. Here is how the system works from registration to refund.

1. What is GST?

GST (Goods and Services Tax) is Papua New Guinea's consumption tax charged on the supply of most goods and services. The standard rate is 10%. It is administered by the Internal Revenue Commission (IRC). GST is charged at each stage of the supply chain, and registered businesses can claim back GST paid on business purchases (input tax) against GST collected on sales (output tax). Exported goods and services are zero-rated, and some essential services like medical, educational, and financial services are exempt.

2. Who does it apply to?

This usually applies to:

Businesses with annual taxable turnover of PGK 250,000 or more (mandatory registration)
Businesses below the threshold that choose to register voluntarily
Importers of goods into Papua New Guinea
Suppliers of taxable goods and services
Non-resident businesses making supplies in PNG

3. Why does it matter?

Understanding GST helps you:

Stay compliant with tax laws
Avoid penalties and late fees
Keep proper records
File and pay correctly
Plan your cash flow better

4. How does it work?

Here's the basic process:

Register for GST with the IRC when your turnover reaches PGK 250,000
Charge 10% GST on all taxable goods and services you sell
Issue tax invoices for every taxable sale
Keep records of all GST collected (output tax) and GST paid on business purchases (input tax)
Calculate your net GST liability (output tax minus input tax)
File your GST return (Form G1) with the IRC by the due date
Pay the net GST amount
If input tax exceeds output tax, apply for a refund from IRC

5. What forms are involved?

Form G1 (GST Return) - Monthly return filed with the IRC showing total supplies, GST collected, and input tax credits claimed
Tax Invoice - Required for every taxable sale above PGK 50 (must include GST registration number, date, description, and GST amount)
Credit Note - Issued when adjusting a previous sale
GST Registration Application - Form to register for GST with the IRC

6. What information do you need?

Before handling GST, make sure you have:

GST registration number from the IRC
Taxpayer Identification Number (TIN)
Complete sales records with GST amounts
Purchase invoices showing GST paid
Import documentation with GST paid at customs
Bank statements for reconciliation
Records separating taxable, zero-rated, and exempt supplies

7. Important deadlines

Filing frequency: Monthly
Payment deadline: GST returns and payments are due by the 21st of the month following the taxable period
Year-end requirements: Reconcile all GST input and output records, ensure all monthly returns are filed, and settle any outstanding GST liabilities

8. Common mistakes to avoid

Not registering for GST when your turnover exceeds PGK 250,000
Charging GST on exempt supplies like medical and educational services
Claiming input tax credits on private or exempt expenses
Filing Form G1 late and incurring penalties
Not issuing proper tax invoices with all required details
Confusing zero-rated exports with exempt supplies
Not keeping records for the required period (usually 6 years)

9. Simple example

You run a hardware store in Port Moresby with monthly sales of PGK 50,000.

GST on sales (output tax): PGK 50,000 x 10% = PGK 5,000
Total charged to customers: PGK 55,000

During the same month, you buy stock worth PGK 30,000 plus GST.

GST on purchases (input tax): PGK 30,000 x 10% = PGK 3,000

Your net GST payable to IRC:

Output tax: PGK 5,000
Less input tax: PGK 3,000
Net GST due: PGK 2,000

You file Form G1 and pay PGK 2,000 by the 21st of the following month.

10. FAQ

Q: Do I need to register for GST if my turnover is below PGK 250,000? A: Registration is not mandatory below the threshold, but you can register voluntarily. This allows you to claim input tax credits on your business purchases.

Q: What supplies are zero-rated? A: Exports of goods and services from Papua New Guinea are generally zero-rated. You charge 0% GST but can still claim input tax credits on related purchases.

Q: What supplies are exempt from GST? A: Medical services, educational services, and financial services are typically exempt from GST in PNG.

Q: What penalties apply for late filing? A: The IRC imposes penalties for late filing and late payment of GST. Interest also accrues on unpaid amounts from the due date.

Q: Can I claim GST on imported goods? A: Yes. GST paid on imports at customs can be claimed as input tax credits on your GST return, provided the goods are used for taxable business purposes.

11. Final takeaway

GST at 10% applies to most business transactions in Papua New Guinea, so filing your Form G1 by the 21st each month and keeping proper tax invoices keeps your business compliant with the IRC.

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What you need to know about Papua New Guinea Sales Tax (GST): Understand the 10% rate, registration requirements, monthly Form G1 filing, and input tax credits to stay compliant.

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