An Investigation into the Current Process and Procedures of Land Taxation System in PNG: A Case Study of Lae City

Abstract

Land Taxation in Lae City, Papua New Guinea (PNG) is a value-based system where the unimproved value is the tax base for the entire country, while the tax rate is different in each province. In Lae City, the tax rate is 5% for commercial and industrial land and 2% for residential and other land. The common loopholes identified in this paper include: lack of implementation of penalties on land tax defaulters, lack of updated valuation roll, lack of updated fiscal cadaster, and the type of land tax payment in one year. Land tax revenue collected in Lae City has been steady between K5 and K6 million from 2007 to 2015 and has gradually increased after 2015. The increase in land tax revenue was caused by the updating of valuation roll in 2016 which was implemented in 2016. It is hoped that the land tax revenue will continue to increase in the coming years.