Executive Summary
The Papua New Guinea Income Tax Bill 2025 was passed in Parliament on 20 March 2025. It is yet to be certified into law. The Bill represents a comprehensive modernisation of the country’s tax framework. Effective from 1 January 2026, following a cooling off period, the new legislation introduces significant structural changes to align with international standards while addressing PNG-specific economic conditions.
While the initial objective had been a simplification and consolidation of the Income Tax Act 1959, one of the oldest Income Tax Acts in the world, many policy changes have made their way into the new Bill. The number of sections has been halved, the length reduced by 80% and the language simplified. The modernization includes major policy reforms, minor policy reforms and technical amendments. Some changes may even benefit taxpayers.
The legislation will be supported by Regulations providing administrative mechanisms, substantiation requirements, and practical implementation frameworks. The Regulations have not yet been published. Comprehensive transitional provisions ensure business continuity while enabling the shift to the new system. Updates are required to the Tax Administration Act to ensure it aligns with the Income Tax Act – these are to follow at a later date.
Key takeaways from the KPMG Guide to Income Tax Bill 2025
- Transitional Rules
- Employment Income
- Business Income
- International Tax
- Sector Specific
- Capital Gains
- Income Tax Regulations
Previous publications on the Income Tax Bill 2025
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