Papua New Guinea
Papua New Guinea (PNG) is an important producer of cobalt, copper, gold, nickel, and silver. The mining sector contributes considerably to PNG’s government tax revenues. The PNG mining sector scores “weak” in the Resource Governance Index 2017.
Main Mining Products
What Are We Doing in Papua New Guinea?
Starting in September 2019, we began working on a long-term engagement program in partnership with PNG’s mining, revenue, and treasury authorities.
Legal and Policy Support
We have reviewed PNG’s mining fiscal regime and supported the state with fiscal modelling to help it negotiate the terms of mining contracts. We also provided guidance to the government on collecting withholding tax on non-resident entities in tax treaty partner countries, which involved a detailed analysis of PNG’s tax treaties and how they interact with law domestically and in contracting states. Additionally, we submitted recommendations to strengthen PNG’s income tax legislation, specifically regarding rules for the extractives sector.
We have conducted training workshops on mineral pricing and taxing offshore indirect transfers of mining assets and are developing a guidance on pricing for gold concentrates, nickel, and cobalt with corresponding trainings. A range of capacity-building activities will include trainings on financial transactions and offshore hubs.
The IGF and the Organisation for Economic Co-operation and Development supported PNG’s revenue agency in conducting transfer pricing risk assessments of mining taxpayers, developing case profiles, identifying information needs, and engaging with taxpayers selected for an audit.