The three layers
Customs duty
Import duty is set by tariff item under the Customs Tariff Act 1990 and is generally assessed on the CIF value: the cost of the goods plus insurance and freight to PNG. Many goods now attract little or no duty, but higher protective rates apply to products that compete with local industry. The only reliable way to know your rate is to classify the goods correctly under the tariff.
Excise
Excise is a selective tax. On imports it applies mainly to motor vehicles, alcohol, tobacco and refined fuel products. For vehicles, private motor vehicles can attract excise of up to 40%, while work vehicles attract around 10%, with rates varying by vehicle category and engine capacity.
GST
Import GST at 10% applies to most goods imported commercially into PNG. It's calculated on a value that includes the customs value plus the duty and any excise, so it's the last layer in the stack.
For the wider shipping picture, see our complete guide to shipping to Lae.
The calculation order
- Work out the CIF value in kina: the cost of the goods, plus freight, plus insurance, converted at the exchange rate Customs applies.
- Customs duty = CIF value × the duty rate for the tariff item.
- Excise (if applicable) is calculated at the relevant rate for the goods. Your broker will confirm the base used for your item.
- GST = (CIF value + duty + excise) × 10%.
- Total government charges = duty + excise + GST, plus any customs entry fees.
Worked example (illustrative only)
The rates below are invented to show the arithmetic. They are not the rates for any real tariff item.
| Line | Calculation | Amount (PGK) |
|---|---|---|
| Cost of goods | Supplier invoice, converted to kina | 50,000 |
| Freight and insurance | To Lae | 8,000 |
| CIF value | 50,000 + 8,000 | 58,000 |
| Customs duty at an assumed 15% | 58,000 × 15% | 8,700 |
| Excise | Not applicable to these goods | 0 |
| GST base | 58,000 + 8,700 + 0 | 66,700 |
| GST at 10% | 66,700 × 10% | 6,670 |
| Total duty and GST | 8,700 + 6,670 | 15,370 |
If the same goods were duty-free under their tariff item, the bill would be GST only: 58,000 × 10% = PGK 5,800. That difference is why classification matters so much.
Why freight costs affect your tax bill
Because duty and GST are both built on the CIF value, a higher freight rate increases the tax as well as the freight. It's one reason to keep an eye on the whole landed cost; see our container cost breakdown. It also means understating freight or insurance on documents is a valuation error, and Customs can penalise it.
Getting classification right
Classification decides the duty rate, and an error in either direction costs you: too high and you overpay, too low and you risk penalties of 50% to 200% of the shortfall. PNG uses the Harmonized System as the base of its tariff. Brokers are trained to classify goods, and if you're unsure, PNG Customs tariff officers at regional offices can advise, with complex matters referred to headquarters in Port Moresby. Be clear whether you're receiving general advice or a formal ruling, because they carry different legal weight.
Exemptions, concessions and deferral
- Low-value goods: goods with a dutiable value of no more than PGK 250 are duty-free.
- Gazetted exemptions: the government can exempt specific goods or projects from duty and GST by notice in the National Gazette. Major infrastructure and resource projects often have these.
- Temporary imports: customs bonds may be available for goods that will be re-exported within 12 months, such as project equipment.
- GST credits: GST-registered businesses can generally claim import GST as an input credit.
- GST deferral: the IRC's import GST deferral scheme can ease cash flow for approved taxpayers with a good compliance history.
A note on vehicles
Vehicles are where the excise layer matters most. Customs may consider the purchase price, freight, insurance, vehicle class, engine capacity and current rules, and the rate for one vehicle shouldn't be assumed for another. Get a written estimate from a licensed broker before you pay for a vehicle. Our guide to shipping vehicles and heavy machinery to Lae covers the other rules.
Paying the assessment
Once your entry is assessed, you'll receive a Notice of Assessment. The rate applied is the one in force on the day the entry was lodged. Payment is due within five clear working days, by electronic transfer or EFTPOS; cash isn't accepted. Late payment attracts interest at 8% per five-day period plus a penalty. See our customs clearance guide for the full process.
Frequently asked questions
Is PNG import duty calculated on FOB or CIF value?
On the CIF value, which includes the cost of the goods, insurance and freight to PNG.
What is the GST rate on imports into PNG?
10%, applied to most commercial imports and calculated on the customs value plus duty and any excise.
Where can I find the duty rate for my product?
Duty rates are set by tariff item under the Customs Tariff Act 1990. Your customs broker can classify your goods, and PNG Customs tariff officers can provide advice or formal rulings.
Do all imports attract duty in PNG?
No. Many goods are duty-free or attract low rates, and goods with a dutiable value of no more than PGK 250 are duty-free. GST still applies to most commercial imports.
Wade Miller
Senior Air Freight Writer, Sydney
Wade has spent more than 20 years in freight, from cargo terminal ramps to forwarding operations and customs documentation, working with importers and exporters across Australia and the Asia-Pacific. He writes practical guides on rates, paperwork and the rules that affect shipments, and reviews them against primary sources such as customs authority publications and carrier notices.
Related guides
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This guide is general information based on publicly available sources at the date shown. Rules, rates and schedules change, so confirm details with PNG Customs, NAQIA, your carrier or a licensed customs broker before you ship. Spotted something out of date? Report a correction.