The multi-billion dollar Liquidified Natural Gas (LNG) project in Papua New Guinea will be exempted from import duty during its construction and preparation phase according to the Customs Tariff (2011 Budget) (Amendment) Bill currently before parliament.
The Customs Tariff Amendment bill is attached with the batch of 2011 Budget bills that were tabled in Parliament on Tuesday last week.
The bill clarifies any doubt about the import Duty Exemptions granted to the PNG LNG Project to be consistent with the intent of the PNG LNG Gas agreement, the budget.
The same amendment bill if passed will implement further reductions to import duties over a period of seven years.
According to Internal Revenue Commission (IRC) Deputy Commissioner of Operations John Pomoso the bill is aimed at achieving a more uniform as well as lower tariff rates; and to encourage a more efficient and productive private sector.
Mr Pomoso said the reduction to import duties and low tariff rates will gradually lead to lower prices for basic goods including food items.
From 2012, the Tariff Reduction Program will reduce input costs for many businesses, reduce the cost of development activities and reduce the price of many consumer goods, Mr Pomoso said.
Other budget bills include the Income Tax (2011 Budget) (Amendment Bill) which when passed will impose a penalty on directors of private companies for failing to take action on notices from the IRC on unpaid salary and wages tax.
The passage of the amendment to the Income Tax bill will ensure that a specific reduction tax is given to companies that are environmentally friendly and cause less pollution to the environment.