Therefore the situation with regard to tariffs, non-tariff barriers, import and export licenses is relatively fluid, but steadily improving. As part of its commitments in APEC and WTO, the Government is removing all non-tariff trade restrictions such as bans, quotas and licensing. The VAT legislation would be accompanied by amendments which gradually would reduce all import duties to zero, other than those imposed solely for protective purposes. Protective tariffs are to be reduced over a period of seven years to internationally acceptable levels. The implementing legislation has not yet been passed by Parliament.
Higher rates apply to tobacco and liquor products.
The 1997 budget reduced protective tariffs on a number of other items as well and lifted an import ban on sugar. Items exempt from duty include rice, medical supplies, certain published materials. Aircraft and aircraft parts and marine vessels are also exempt from import duties when purchased and imported by registered PNG companies. Import duties are imposed on the C.I.F. value of most products. In 1997, PNG instituted a pre-shipment inspection program.