Excise

Excise is generally a tax or levy charged on certain goods/products both locally manufactured or imported which have been legally described or declared as Excisable Products through a Bill passed in parliament and gazetted.

The main Excisable products that are currently manufactured locally are Beer, Tobacco Products, Spirituous Liquors, Wine Products and Petroleum Products. These products attract the Excise tax referred to as Local Excise duty. The Excise tax applied on imported excisable goods is referred to as Import Excise duty.

The Chief Commissioner of Customs has the powers to Administer and control the manufacture of excisable products inland/locally and the collection of excise duties within the meaning of the Excise Act.

All locally manufacturers of excisable goods must be registered with PNG Customs and pay a license to operate such facilities. This license is renewable every year on or by the 10th working day of the year. In addition to license, Customs requires a security for the excise duty in the form of a Bank Guarantee, an amount determined by the Chief Commissioner of Customs.

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Excise Operations

Excisable Tax/Rates

The rates on locally produced excisable goods are adjusted or increased at 2.5% or the CPI movement expressed in percentage, whichever is the lesser every six months. These new rates would apply on 1st June and 1st December every year. The Excise Tariff Act is amended every year during budget sessions to reflect the new rates for the fiscal year. Current rates can be found in schedule 1 of the Excise Tariff (Amendment) Act.

Lodgment of Goods Declarations- Local Excise Declaration

Local Excise Declarations must be lodged within five clear working days after sales or delivery of the goods. Penalty will be imposed for late lodgements stipulated in Section 39 of the Excise Act 1956.

Weekly Excise Duty Payments

Excise Regulation 82 stipulates that all payments of Excise duty on locally manufactured excisable products must be made weekly, no later than the 5th working day of the week, succeeding any working week, being from Monday to Saturday in which any sales of such products were made.

Excise duties must be paid within five clear working days of assessment notice being issued. If it is not paid within five days, a late payment penalty interest of 8% will be applied for 5 days or part thereof.