G/SCM/N/284/PNG  
G/SCM/N/290/PNG  
G/SCM/N/299/PNG  
 
21 November 2017  
(17-6353) Page: 1/14 
Committee on Subsidies and Countervailing Measures  Original: English  
 
 
SUBSIDIES  
NEW AND FULL NOTIFIC ATION PURSUANT TO AR TICLE XVI:1 OF THE G ATT 1994  
AND ARTICLE 25 OF TH E AGREEMENT ON SUBSI DIES 
AND COUNTERVAILING M EASURES  
PAPUA NEW GUINEA 
The following communication, dated 10 November 2017, is being circulated at the request of the 
Delegation of Papua New Guinea.  
 
_______________  
 
 
1. Title of the subsidy programme, if relevant, or brief description or identification of 
the subsidy  
 
Section 45B under Division 1A – Export Incentives of the Income Tax Act of Papua New Gu inea. 
 
2. Period covered by the notification  
 
The period covered is calendar years 2014 - 2015 
 
3. Policy objective and/or purpose  
 
Section 45B of the Income Tax Act is an export incentive provided to the companies by the 
Government, which aims to attract export -oriented manufacturing and foreign investment through 
the provision of export incentives. It provides for exemption from income tax, of profits resulting 
from new export sales. The amount exempted is the total net income from export sales for the 
first three years after exports have started. For another four years thereafter, increases in net 
export income, measured over the rolling average of the previous three years net export income, 
are exempted. Given the company tax rate of 30% , the subsidy pr ovided is 30% of net profits 
derived from export sales, for the periods and to the extent shown above.  
 
4. Background and authority  
 
Section 45B is under "Division 1A – Export incentives" of the Income Tax Act. The subsidy was 
introduced in 1984 and is ad ministered by the Internal Revenue Commission, the government 
agency responsible for taxation and customs matters in Papua New Guinea.  
 
5. Form  
 
Income tax exemption for up to 100% of net income derived from export sales of a variety of 
goods (mainly minin g and petroleum products) for three years. After this period, any export 
income which is in excess of the average of the prior years can be treated as exempt income, up 
to and including the seventh year.  
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  6. To whom and how the subsidy is provided (whether to producers, to exporters, or 
others; through what mechanism; whether a fixed or fluctuating amount per unit; if the 
latter, how determined).  
 
In 2014 -2015, records show that no company has lodged an application to benefit from this 
subsidy prog ramme.  
 
7. Amount/subsidy per unit or in cases where this is not possible, the total amount or 
the annual amount budgeted for that subsidy (indicating, if possible, the average 
subsidy per unit in the previous year). Where provision of per unit subsidy in formation 
(for the year covered by the notification, for the previous year, or both) is not possible, 
a full explanation.  
 
The standard company tax in Papua New Guinea is 30% and the subsidy provided is 30% of net 
profits derived from export sales. Records  show that no company has lodged a tax return 
specifically requesting to benefit from this programme. Therefore there is no data available.  
 
8. Duration of the subsidy and/or any other time limits to it, including date of 
inception/commencement  
 
Section 4 5B of the Income Tax Act has been repealed effective from 1 January 2015, according to 
the Income Tax (2012 Budget) (Amended Act 2011). A copy of the Income Tax (2012 Budget) 
(Amended Act 2011) is attached for reference.  
 
9. Statistical data permitting an assessment of the trade effects of the subsidy. The 
specific nature and scope of such statistics is left to the judgement of the notifying 
Member. To the extent possible, relevant and/or determinable, however, it is desirable 
that such information include statistics of production, consumption, imports and exports 
of the subsidized product(s) or sector(s):  
 
The statistical data for this period is not available as most companies targeted by the Government 
for this subsidy did not apply for assistance under th is programme to export.  
 
_______________  
 
 
 
 
 
  G/SCM/N/284/PNG • G/SCM/N/290/PNG • G/SCM/N/299/PNG  
 
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  No. 12 of 2011.  
 
Income Tax (2012 Budget) (Amendment) Act 2011.  
 
ARRANGEMENT OF SECTIONS.  
 
1. Interpretation (Amendment of Section 4).  
2. New Section 10A.  
 
  "10A. COMPUTER SERVICE."  
 
3. New Section 22B.  
 
 "22B.  EXEMPTION FOR 2015 PACIFIC GAMES."  
 
4. Exemption related to export sales (Amendment of Section 45B).  
5. New Section 46CA.  
 
"46CA.  CONCESSIONAL TREATMENT OF APPROVED REDUNDANCY PAYMENTS".  
 
6. 150% deductions for the gifts in respect of the 2015 Pacific Games (Repeal and 
Replacement of Section 69K).  
 
"69K.  150% DEDUCTIONS FOR GIFTS IN RESPECT OF THE 2015 PACIFIC GAMES".  
 
7. Losses of previous years not to be taken into account unless there is substantial continuity 
of ownership (Amendment of Secti on 101D).  
8. Special provisions relating to beneficial ownership of, or rights attached to, shares 
(Amendment of Section 101E).  
9. Losses of previous years of subsidiary not to be taken into account unless there is 
substantial continuity of beneficial owne rship of shares in holding company (Amendment of 
Section  101F).  
10. Losses of previous years may be taken into account where a company carries on same 
business (Amendment of Section 101G).  
11. Interpretation (Amendment of Section 155).  
12. Deduction for th e allowable capital expenditure (Amendment of Section 155E).  
13. New Sections 155T, 155U, 155V, and 155W  
 
"155T.  DEDUCTION FOR SITE REHABILITATION EXPENDITURE".  
 
"155U.  LOSSES OF PREVIOUS YEARS INCURRED IN ENGAGING IN SITE 
REHABILITATION".  
 
"155V.  DEDUCTION OF REHABILITATION LOSSES OUTSIDE OF RESOURCE 
PROJECT".  
 
"155W.  REHABILITATION LOSS CAP".  
 
14. Project basis of assessment (Amendment of Section 156A).  
15. Project basis of assessment (Amendment of Section 157A).  
16. Project basis of assessment (A mendment of Section 158A).  
17. Related corporations (Amendment of Section 158F).  
18. Interpretation (Amendment of Section 159A).  
19. Credits in respect of prescribed infrastructure developments (Amendment of Section 219C).  
20. Credits in respect of bank co mmunity service obligations (Amendment of Section 219D).  
21. Refund of taxes overpaid (Amendment of Section 234).  
22. New Section 243.  
 
"243.   REMOVAL OR SUSPENSION OF PERSON CONSTITUTING TRIBUNAL."  
 
23. Interpretation (Amendment of Section 258A).  
24. Penalty for unpaid tax (Amendment of Section 262).  G/SCM/N/284/PNG • G/SCM/N/290/PNG • G/SCM/N/299/PNG  
 
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  25. New Section 316A.  
 
"316A.  INCOMPLETE RETURNS AND FORMS."  
 
26. New Section 323.  
 
"323.   TAXATION PROSECUTIONS.".  
 
27. Repeal.  
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  No.  of 2011  
 
AN ACT  
 
entitled  
 
Income Tax (2012 Budget)(Amendment) Act 2011.  
 
 
Being an Act to amend the Income Tax Act 1959,  
 
MADE by the National Parliament and deemed to have come into operation on - 
 
(a) in respect of Sections 3 and 6, 1 April 2011; and  
(b) in respect of the remainder of the Act, 1 January 2012.  
 
1. INTERPRETAT ION (AMENDMENT OF SECTION 4).  
 
Section 4 of the Principal Act is amended in Subsection (1) in the definition of "property unit trust" 
by repealing Paragraph (b)(ii) and replacing it with the following:  
 
"(ii) not less than 50% of the fund was invested in Papua New Guinea; and".  
 
2. NEW SECTION 10A.  
 
The Principal Act is amended by inserting after Section 10 the following new section:  
 
"10A.  COMPUTER SERVICE.  
 
"(1) The Commissioner General may establish and operate a computer service and make 
provision for returns or any other document required or authorized by this Act to be made, served 
or submitted by electronic transmission (referred to in this Act as an electronic notice).  
 
"(2) The Commissioner General may approve from time to time, conditions for - 
 
(a) the returns or any other document which may be transmitted through the 
computer service including the form and manner in which they are to be 
transmitted; or  
(b) the correction of errors in or amendments to electronic notices; or  
(c) the procedure for  use of the computer service including the procedure in 
circumstances where there is a breakdown or interruption in the service; or  
(d) generally for the better provision of the computer service."  
 
3. NEW SECTION 22B.  
 
The principal Act is amended by ins erting after Section 22A a new section as follows:  
 
"22B.  EXEMPTION FOR 2015 PACIFIC GAMES.  
 
"(1) The income of the 2015 PNG Pacific Games Limited is exempt from income tax.  
 
"(2) The income derived by any person arising from, or in connection with, the 
participation by that person as an athlete or competitor in the 2015 Pacific Games is exempt from 
income tax.  
 
"(3) This exemption shall cease to apply as of 1 January 2016.".  
 
4. EXEMPTION RELATED TO EXPORT SALES (AMENDMENT OF SECTION 45B).  
 
Section 45B o f the Principal Act is amended - 
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  (a) in Subsections (1) and (2) by repealing the word and figure "Subsection (3)" and 
replacing them with "Subsections (3) and (4)"; and  
 
 (b) by inserting after Subsection (3), the following new subsection:  
 
"(4) Despite S ubsection (3), the exemption provided under this section shall cease 
to apply as of 1 January 2015 and the provisions of Subsection (1) and (2) shall 
continue to apply to income derived from export sales where the declared year of 
income is prior to 1 Janu ary 2015.".  
 
5. NEW SECTION 46CA.  
 
The principal Act is amended by inserting after Section 46C a new section as follows:  
 
"46CA. CONCESSIONAL TREATMENT OF APPROVED REDUNDANCY PAYMENTS.  
 
(1) In this section - 
 
"approved redundancy scheme" means a scheme for  which an employer has applied in 
writing for approval from the Commissioner General, and the Commissioner General has 
approved the scheme under Subsection (2);  
 
"concessional component" means the lesser of - 
 
(a) the amount calculated using the formula, B ase Amount + (Service Amount x 
Years of Service) where - 
 
(i) "base amount" means K5,000; and  
(ii) "service amount" means K2,000; and  
(iii) "years of service" means the number of completed years of continuous 
service during which the taxpayer was employed by the same employer; 
or 
(b) K50,000;  
 
"eligible taxpayer" means a resident of PNG - 
 
(a) with at least five years of continuous service with an employer; and  
(b) who receives a redundancy payment upon termination of their employment with 
the employer unde r an approved redundancy scheme; and  
(c) who is dismissed before the earlier of the following:  
 
(i) the day he or she turned 65; or  
(ii) if the taxpayer's employment would have terminated when he or she 
reached a particular age or completed a particular pe riod of service, the 
day he or she would reach the age or complete the period of service (as 
the case may be); and  
(iii) who has not previously received an amount taxed under Subsection 
46CA(5) from the employer.  
 
"redundancy payment" means so much of a payment - 
 
(a) made under an approved redundancy scheme; and  
(b) received by an employee who is dismissed from employment because the 
employee's position is genuinely redundant and, at the time of the dismissal, 
there was no arrangement between the employe e and the employer, or 
between the employer and another person, to employ the employee after the 
dismissal; and  
(c) as exceeds the amount that could reasonably be expected to be received by the 
employee in consequence of the voluntary termination of his or her employment 
at the time the employment ceases; and  G/SCM/N/284/PNG • G/SCM/N/290/PNG • G/SCM/N/299/PNG  
 
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  (d) if the dismissal was not at arm's length, the amount tha t does not exceed the 
amount that could reasonably be expected to have been made if the dismissal 
were at arm's length,  
 
but does not include so much of a payment - 
 
(e) received in lieu of superannuation benefits to which the employee may have 
become ent itled at the time the payment was received or at a later time; or  
(f) a superannuation benefit; or  
(g) a payment of a pension or an annuity (whether or not the payment is a 
superannuation benefit); or  
(h) an unused annual leave payment; or  
(i) an unused lo ng service leave payment; or  
(j) a payment that is an advance or a loan to an employee on terms and conditions 
that would apply if the employee and the employer were dealing at arm's 
length; or  
(k) a payment that is deemed to be a dividend under this Act; or 
(l) an amount included in your assessable income in relation to an employee share 
scheme; or  
(m) a capital payment for, or in respect of, personal injury to an employee; or  
(n) a capital payment for, or in respect of, a legally enforceable contract in r estraint 
of trade.  
 
(2) The Commissioner General shall approve the scheme under the definition of 
"approved redundancy scheme" in Subsection (1) if he is satisfied that at least 30 employees are 
to be genuinely made redundant under that scheme, or the empl oyee or employees are genuinely 
made redundant from the public sector.  
 
(3) The application referred to in Subsection (1) must contain information on - 
 
(a) the positions to be made redundant; and  
(b) the amounts of the redundancy payments; and  
(c) the amounts of the concessional components; and  
(d) the amounts of salary and wages of eligible taxpayers; and  
(e) any other information prescribed by the Commissioner General.  
 
(4) Despite anything else in this Act - 
 
(a) the taxable income of an eligible tax payer that is the concessional component of 
a redundancy payment; or  
(b) a termination payment pursuant to a termination under the Rationalisation of 
the Public Service (Budget Provisions)  Act 1995  paid on or after 
1 January  2012,  
 
shall be taxed at the ra tes set out in Subsection 1(4) of the Income Tax (Salary or 
Wages Tax)  Rates Act 1979 .". 
 
6. 150% DEDUCTIONS FOR GIFTS IN RESPECT OF THE 2015 PACIFIC GAMES (REPEAL 
AND REPLACEMENT OF SECTION 69K).  
 
Section 69K of the Principal Act is repealed and replaced with the following:  
 
"69K.  150% DEDUCTIONS FOR GIFTS IN RESPECT OF THE 2015 PACIFIC GAMES.  
 
"(1) The amount (the market value of which is not less than K500,000) of a gift of money, 
or property purchased by a taxpayer in the 12 months immediately preceding  the making of the 
gift, made by the taxpayer, in respect of the 2015 Pacific Games to - 
 
(a) the PNG Sports Federation & Olympic Committee Inc.; or  
(b) the Pacific Games (2015) Authority; or  
(c) PNG 2015 Pacific Games Limited,  
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  shall be an eligible amount.  
 
"(2) The taxpayer shall be allowed under this section either an amount equal to 150% the 
eligible amount as an allowable deduction under this section.  
 
"(3) Where an eligible amount (or part thereof) allowed under this section is recouped or 
recou pable, an amount shall be included in assessable income to the extent that a deduction has 
been allowed.  
 
"(4) Where a 150% deduction is allowed under this section, the amount deductible shall be 
allowable only to the extent that the tax saving resulting f rom the allowance of the deduction does 
not exceed 45% of the eligible amount.  
 
"(5) This section applies to gifts made up until 31 December 2015.".  
 
7. LOSSES OF PREVIOUS YEARS NOT TO BE TAKEN INTO ACCOUNT UNLESS THERE IS 
SUBSTANTIAL CONTINUITY OF OWNERSH IP (AMENDMENT OF SECTION 101D).  
 
Section 101D of the Principal Act is amended by - 
 
(a) repealing the word, figure and letter "and 101A" and replacing them with the 
following:  
 
"101A, and l55U"; and  
 
(b) repealing the word, figure and letter "or 101A" and replacing them with the following:  
 
"101A, or 155U".  
 
8. SPECIAL PROVISIONS RELATING TO BENEFICIAL OWNERSHIP OF, OR RIGHTS 
ATTACHED TO, SHARES (AMENDMENT OF SECTION 101E).  
 
Section 101E of the Principal Act is amended by repealing the word, figure and letter "or 101A" 
and replacing them with the following:  
 
"101A, or 155U".  
 
9. LOSSES OF PREVIOUS YEARS OF SUBSIDIARY NOT TO BE TAKEN INTO ACCOUNT 
UNLESS THERE IS SUBSTANTIAL CONTINUITY OF BENEFICIAL OWNERSHIP OF SHARES 
IN HOLDING COMPANY (AMENDMENT OF SECT ION 101F)  
 
Section 101F of the Principal Act is amended in Subsection (1) by - 
 
(a) repealing the word, figure and letter "and 101D" and replacing them with the 
following  - 
 
"101D and 155U"; and  
 
(b) repealing the word, figure and letter "or 101A" second t ime occurring and replacing 
them with the following:  
 
"101A or 155U".  
 
10. LOSSES OF PREVIOUS YEARS MAY BE TAKEN INTO ACCOUNT WHERE A COMPANY 
CARRIES ON SAME BUSINESS (AMENDMENT OF SECTION 101G).  
 
Section 101G of the Principal Act is amended - 
 
(a) in Subs ection (1), Paragraph (a) by repealing the word, figure and letter "or 101A" 
and replacing them with the following:  
 
"101A, or 155U"; and  G/SCM/N/284/PNG • G/SCM/N/290/PNG • G/SCM/N/299/PNG  
 
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(b) in Subsection (2), Paragraph (b) by repealing the word, figure and letter "or 101A" 
and replacing them with the following:  
 
"101A or 155U".  
 
11. INTERPRETATION (AMENDMENT OF SECTION 155).  
 
Section 155 of the Principal Act is amended in Subsection 1 by - 
 
(a) inserting, after the definition of "resource right", the following new definition:  
 
"site rehabilitation act ivity" means an activity carried on by or for a taxpayer to restore or 
rehabilitate (whether partially or fully) a site on which the taxpayer for the purposes of 
producing income, carries or carried on a resource project to the condition, or a reasonable 
approximation of the condition, it was in before operations were first started on the site 
(whether the activity was first started by the taxpayer or a predecessor of the taxpayer 
whether immediate or otherwise), including any activities as prescribed by re gulation; and  
 
(b) repealing and replacing the definition of "resource project" as follows:  
 
"resource project" means a designated gas project, a mining project or a petroleum project, 
including any resource environmental protection activity in relation t o the designated gas, 
mining or petroleum project.".  
 
12. DEDUCTION FOR ALLOWABLE CAPITAL EXPENDITURE (AMENDMENT OF SECTION 
155E).  
 
Section 155E of the Principal Act is amended by inserting a new subsection after Subsection (6) as 
follows:  
 
"(7) To the ext ent that expenditure is incurred solely or predominantly for - 
 
(a) environmental protection activities as defined in Section 72D(1); or  
(b) environmental impact study as defined in Section 72E(1); or  
(c) site rehabilitation activities,  
 
Section 155E(6) does not apply.".  
 
13. NEW SECTIONS 155T, 155U, 155V AND 155W.  
 
The Principal Act is amended by inserting the new sections after Section 155S as follows:  
 
"155T  DEDUCTION FOR SITE REHABILITATION EXPENDITURE.  
 
"(1) Expenditure incurred by a taxpayer is an a llowable deduction to the extent that it is 
incurred for the sole or dominant purpose of one or more site rehabilitation activities, provided 
that it is not an outgoing of capital, of a capital nature, or incurred for private or domestic 
purposes, or in pr oducing exempt income.  
 
"(2) A provision that expressly prevents or restricts the operation of Subsection 68(1) 
applies in the same way to this section.  
 
"(3) Where an amount (or part thereof) is allowed under this section is recouped or is 
recoupable, an amount is included in assessable income to the extent that a deduction has been 
allowed.".  
 
"155U.  LOSSES OF PREVIOUS YEARS INCURRED IN ENGAGING IN SITE 
REHABILITATION.  
 
"(1) In this section, "net exempt income" has the same meaning as in Section 101.  
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  "(2) A taxpayer, in relation to a resource project, is taken to have incurred a rehabilitation 
loss in any income year where - 
 
(a) the aggregate of deductions attributable to that project that result from the 
operation of Subsections 72D(2), 155T(1) and 155E (7), exceed the assessable 
income and net exempt income of that year attributable to that project; and  
(b) the excess referred to in Paragraph (a), together with the total of rehabilitation 
loss or losses incurred in all preceding income years in relation to the resource 
project, does not exceed the rehabilitation loss cap (if any) for the project.  
 
"(3) An amount of rehabilitation loss cannot form a part of a loss taken to be incurred 
under either Subsections 101(2) or 101A(2).  
 
"(4) Subject to Subsection 66A(3), so much of the rehabilitation loss incurred by a 
taxpayer as has not been allowed as a deduction from his income is allowable as a deduction in 
accordance with the following provisions:  
 
"(a) where he has not, in the year of income, derived exempt income, the deduction 
is made from the assessable income remaining after all deductions, apart from 
those under this Section and those under Subsections 101(3) and 101A(4); and  
"(b) where he has in that year derived exempt income, the deduction is made 
successively from the net exempt income and from the assessable income 
remaining after all deductions apart from those under this section and those 
under Subsections 101(3) and 101A(4); and  
"(c) where a deduction is allowable under this section in respect of two or more 
rehabilitation losses, the losses are taken into account in the order in which the 
losses were incurred; and  
"(d) where a deduction is allowable under this section, it is deducted after the 
allowance of all other deductions except for deduction s under Subsections 
101(3) and 101A(4).  
 
"(5) Where, before the year of income, a taxpayer has become a bankrupt or been 
adjudicated insolvent or has been released from any debts by the operation of the law of Papua 
New Guinea relating to bankruptcy or ins olvency, no loss to which this section applies that was 
incurred by him before the date on which he became a bankrupt or was adjudicated insolvent, or 
the date on which he was so released, as the case may be, is a rehabilitation loss.  
 
"(6) Where deduction s are allowable from the income of a taxpayer of the year of income 
under this section and either Subsection 101(3) or Subsection 101A(4) or both, any deductions 
allowable under this section are taken into account before any deductions allowable under 
Subsection 101(3) or Subsection 101A(4).  
 
"(7) Where, but for this Subsection, the net exempt income of a taxpayer of the year of 
income would be taken into account for the purpose of this Section, and either Section 101 or 
Section 101A or both, the amount of that net exempt income to be taken into account for the 
purpose of Section 101 or Section 101A or both shall not exceed the amount (if any) of that net 
exempt income that remains after deducting so much of the net exempt income as has been taken 
into accou nt under this Section.".  
 
"155V.  DEDUCTION OF REHABILITATION LOSSES OUTSIDE OF RESOURCE PROJECT.  
 
"(1) Where - 
 
"(a) a taxpayer could, but for Sections 156A, 157A or l58A, deduct an amount of 
rehabilitation loss in an income year against an amount of net e xempt income 
or assessable income from another resource project that remains after all 
deductions; and  
"(b) in the income year, but for this section, the amount of the assessable income 
referred to in Paragraph (a) would be subject to a rate of tax not exc eeding that 
of the resource project to which the rehabilitation loss relates; and  
"(c) the taxpayer has made an election in writing signed by or on behalf of the 
taxpayer, delivered to the Commissioner General on or before the last day for G/SCM/N/284/PNG • G/SCM/N/290/PNG • G/SCM/N/299/PNG  
 
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  the furnishing o f the taxpayer's return of income for that year of income, or 
within such further time as the Commissioner General allows, to deduct an 
amount not exceeding that referred to in Paragraph (a),  
 
then Sections 156A, 157A and 158A do not apply to the taxpayer  in relation to the amount 
the subject of the election.  
 
"(2) Where, at a particular time - 
 
"(a) a taxpayer ceases to have an interest in a resource project consequent upon - 
 
(i) the surrender, cancellation or expiry of a resource development licence; or  
(ii) the disposal by the taxpayer of the whole of its interest in the resource project; 
or 
(iii) abandonment of a resource project occurs,  
 
and immediately before such cessation, disposal or abandonment a taxpayer was entitled to 
the benefit of rehabilit ation losses in relation to that resource project, the Commissioner 
General may at any time allocate that rehabilitation loss - 
 
"(b) if the taxpayer or a related corporation has a beneficial interest in any other resource 
project from which the taxpayer i s deriving assessable income, to that resource 
project or those resource projects, as the case may be, in such proportions as the 
Commissioner General considers reasonable; or  
"(c) if the taxpayer or a related corporation has no beneficial interest in ano ther resource 
project but has a beneficial interest in any other resource project from which the 
taxpayer or the related corporation, as the case may be, is deriving assessable income 
from resource operations, to that resource project or those resource pro jects, as the 
case may be, in such proportions as the Commissioner General considers reasonable; 
or 
"(d) in any other case, to any resource project or if no resource project becomes available 
to any resource project carried on by the taxpayer or by a relat ed corporation 
pursuant to any development licence issued within 20 years from the date of such 
cessation or abandonment,  
 
and following the allocation, that rehabilitation loss shall become rehabilitation loss of the 
taxpayer or of the related corporatio n, as the case may be, in relation to the resource 
project or projects to which it was allocated (other than for the purposes of Subdivision E), 
with effect from the date of allocation.".  
 
"155W.   REHABILITATION LOSS CAP.  
 
"(1) In relation to a resource pr oject, a taxpayer may make one irrevocable election, in 
writing to the Commissioner General signed by or on behalf of the taxpayer, delivered to the 
Commissioner General on or before the last day for the furnishing of the taxpayer's return of 
income for th at year of income (or within such further time as the Commissioner General allows) 
identifying up to five consecutive income years, all of which immediately precede the income year 
in which the election is made, in relation to the resource project for the purpose of establishing a 
rehabilitation loss cap.  
 
"(2) The rehabilitation loss cap is the sum of the taxpayer's share of the adjusted taxable 
income of the project of the income years identified in the election made in Subsection (1).  
 
"(3) In relation to a resource project, the adjusted taxable income of an income year is - 
 
"(a) if the taxable income for that year is a positive amount and is subject to rates of 
taxation not less than the normal company tax rate for that income year, the 
taxable income of that year; or  
"(b) otherwise, it is zero.".  
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  14. PROJECT BASIS OF ASSESSMENT (AMENDMENT OF SECTION 156A).  
 
Section 156A of the Principal Act is amended - 
 
(a) in Subsection (1) by inserting, after the words, "notwithstanding any other provision 
of this Act", the words -  
 
"except for Section 155V,"; and  
 
(b) by inserting a new Subsection (3) as follows:  
 
"(3) Notwithstanding any other provision of this Act, for each person to whom this 
subdivision applies, the Commissioner General may require the lodgeme nt of separate 
returns for each project undertaken and may issue separate assessments for each 
project. ".  
 
15. PROJECT BASIS OF ASSESSMENT (AMENDMENT OF SECTION 157A).  
 
Section 157A of the Principal Act is amended - 
 
"(a) in subsection (5), by repealing the word "Each" first occurring and replacing it with the 
words - 
 
"Except for Section 155V, each"; and  
 
"(b) by inserting after Subsection (7), the following new subsection:  
 
"(8) Notwithstanding any other provision of this Act, for each person to whom th is 
subdivision applies, the Commissioner General may require the lodgement of separate 
returns for each project undertaken and may issue separate assessments for each 
project.".  
 
16. PROJECT BASIS OF ASSESSMENT (AMENDMENT OF SECTION 158A).  
 
Section 158A of  the Principal Act is amended - 
 
"(a) in Subsection (2) by repealing the word "Each" first occurring and replacing it with the 
words -  
 
"Except for Section 155V, each"; and  
 
"(b) by inserting after Subsection (4), the following new subsection:  
 
"(5)  Notwithstanding any other provision of this Act, for each person to whom this 
subdivision applies, the Commissioner General may require the lodgement of separate 
returns for each project undertaken and may issue separate assessments for each 
project.".  
 
17. RELATED CORPORATIONS (AMENDMENT OF SECTION 158F).  
 
Section 158F of the Principal Act is amended by repealing the word and figure "Section 101" and 
replacing them with the following:  
 
"Sections 101 or 155U".  
 
18. INTERPRETATION (AMENDMENT OF SECTION 159A).  
 
Section 159A of the Principal Act is amended in Subsection (1) in the definition of "project 
deductions" by deleting, in Paragraph (a), the figure "101" and replacing with the following:  
 
", 101 or 155U".  
 G/SCM/N/284/PNG • G/SCM/N/290/PNG • G/SCM/N/299/PNG  
 
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  19. CREDITS IN RESPECT OF PRESCRIBED INFRA STRUCTURE DEVELOPMENTS 
(AMENDMENT OF SECTION 219C).  
 
Section 219C of the Principal Act is amended by - 
 
(a) inserting after the definition of "eligible taxpayer", the following new definition:  
"emergency repair" means, in relation to the Highlands Highway,  an activity carried out to restore 
traffic flow following an event that has resulted in the closure or partial closure of the highway, 
including bypass or replacement of a section of the highway, replacement of culverts, construction 
of temporary bridges and removal and repair of major landslips;  
 
 (aa) inserting after the definition of "gas project companies", the following new definition:  
 
"Highlands Highway" means the main road from - 
 
(a) Lae to Koroba (Fugwa turn off)(805km); and  
(b) Togoba Junction t o Wabag; and  
 
(b) repealing Subsections (6) and (7); and  
(c) inserting a new subsection as follows:  
 
"(6) In addition to any deemed tax payment under Subsection (2), where an eligible 
taxpayer incurs, prior to 1 January 2015, expenditure on emergency repair on the Highlands 
Highway, the amount of such expenditure is, subject to this section and prescribed conditions, 
deemed to be income tax paid in respect of that taxpayer's liability assessed for the year of tax 
relating to that year of income, limite d to the lesser of - 
 
(a) 1.25% of the assessable income derived by the taxpayer in the year of income; or  
(b) the amount of tax payable.".  
 
20. CREDITS IN RESPECT OF BANK COMMUNITY SERVICE OBLIGATIONS (AMENDMENT 
OF SECTION 219D).  
 
Section 219D of the Prin cipal Act is amended - 
 
(a) in Subsection (1), by repealing Paragraph (b) in the definition of "basic banking 
product" and replacing it with the following new paragraph:  
 
"(b) the customer is charged no more than Kl.00 per transaction for a deposit or 
withdrawal;"; and  
 
(b) in Subsection (2), by repealing the figure "2012" and replacing it with the following:  
 
"2017".  
 
21. REFUND OF TAXES OVERPAID (AMENDMENT OF SECTION 234).  
 
Section 234 of the Principal Act is amended in Paragraph (d) by repealing the foll owing: "customs 
duty, excise duty,".  
 
22. NEW SECTION 243.  
 
Section 243 of the Principal Act is repealed and replaced with the following new section: - 
 
"243.  REMOVAL OR SUSPENSION OF PERSON CONSTITUTING TRIBUNAL.  
 
The Minister may remove or suspend the person constituting the Tribunal from office in accordance 
with the terms and conditions of his appointment.".  
 
23. INTERPRETATION (AMENDMENT OF SECTION 258A).  
 
Section 258A of the Principal Act is amended in Paragraph (b) by - G/SCM/N/284/PNG • G/SCM/N/290/PNG • G/SCM/N/299/PNG  
 
- 14 - 
 
  (a) repealing the figures, l etters and marks "136E, 136G," and "265,"; and  
(b) by inserting after the figure and mark "316," the following:  
 
"3l6A,".  
 
24. PENALTY FOR UNPAID TAX (AMENDMENT Of SECTION 262).  
 
Section 262 of the Principal Act is amended in Subsection (3) by - 
 
(a) by repealing the word "section" and replacing it with the word "Division"; and  
(b) by inserting after the word "any" the word "additional".  
 
25. NEW SECTION 316A.  
 
The Principal Act is amended by inserting the following new section after Section 316:  
 
"316A.  ADDITIONAL TAX FOR INCOMPLETE RETURNS AND FORMS.  
 
"(1) Notwithstanding anything contained in the preceding sections, a person who lodges a 
return or any other form approved by the Commissioner General that is not duly completed in 
every particular as requi red under this Act and Regulation, may be liable to pay a penalty, by way 
of additional tax, of K500.00 for each month or part of the month calculated in respect of the 
period commencing on the day that return is first lodged and ending on the day on which  that 
return is lodged duly completed.  
 
"(2) The Commissioner General may for reasons considered sufficient, remit additional tax 
under Subsection (1) or any part of the additional tax, before or after making an assessment of 
the additional tax.".  
 
26. NEW  SECTION 323.  
 
Section 323 of the Principal Act is repealed and replaced with the following new section:  
 
"323.  TAXATION PROSECUTIONS.  
 
"(1) A taxation prosecution for the recovery of a pecuniary penalty under this Act may be 
instituted in the name of the Commissioner General by way of information or action in a court of 
competent jurisdiction.  
 
"(2) A taxation prosecution under this Act may be commenced, prosecuted and proceeded 
with in accordance with any rules of practice and procedure established by the  relevant court of 
competent jurisdiction.  
 
"(3) Despite Subsection (2), a taxation prosecution under this Act may be commenced at 
any time.".  
 
27. REPEAL.  
 
Sections 324, 325, 326 and 327 are repealed.  
 
I hereby certify that the above is a fair print of th e Income Tax (2012 Budget) (Amendment) 
Act 2011  which has been made by the National Parliament.  
 
Acting Clerk of the National Parliament.  
 
 
I hereby certify that the Income Tax (2012 Budget) (Amendment) Act 2011  was made by 
the National Parliament on 21 December 2011.  
 
Acting Speaker of the National Parliament.  
 
__________