EXPLANATORY MEMORANDUM Customs Tariff …

1 Customs Tariff (2018 Budget)(Amendment) - 1 - EXPLANATORY MEMORANDUM Customs Tariff (2018 Budget)(Amendment) Bill 2017 The bill proposes an amendment to: 1. suspend the last phase of the TRP scheduled for 2018 until a review is conducted. There has been significant concerns raised by PNG manufacturers on the stiff competition coming from imported goods. Hence, the Government in an effort to support local manufacturers increased import tariffs on certain Tariff items. This Bill is expected to reduce health related issues, enable local manufacturers to compete with imports, increase economic activities and create employment for our people. 2. corrects the drafting errors and restore missing headings, Tariff codes and items, descriptions and duty rates. 3. capture resource rent based on log value by applying progressive duty rate on export of unprocessed old-growth logs.

2 The fixed rate does not capture the value of the logs and therefore does not act as a resource rent. 4. increase the Tariff rate for Diesel and Petrol to per litre. PNG Customs Service argue that the importers of petroleum products are making super profits relative to the local producer. This measure is intended to provide a level playing field for both importers and the local producer. Customs Tariff (2018 Budget)(Amendment) - 2 - Draft 24/11/2017 INDEPENDENT STATE OF PAPUA NEW GUINEA No. of 2017. Customs Tariff (2018 Budget)(Amendment) Bill 2017 ARRANGEMENT OF CLAUSE. 1. Amendment to Schedule 1 Rates of Import Duty. 2. Amendment to Schedule 2 Rate of Export Duty. Customs Tariff (2018 Budget)(Amendment) - 3 - Draft of 24/11/2017 INDEPENDENT STATE OF PAPUA NEW GUINEA A BILL For AN ACT entitled Customs Tariff (2018 Budget)(Amendment) Bill 2017, Being an Act to amend the Customs Tariff Act 1990, MADE by the National Parliament to come into operation on 1 January 2018.

3 1. AMENDMENT OF SHEDULE 1 RATES OF IMPORT DUTY Schedule 1 of the Principal Act is amended by:- (i) repealing the Tariff item, description of goods and the rates of import duty and remarks shown in the following and replacing them with the Tariff item, description of goods and Tariff rates and remarks shown below:- Tariff Item Description of Goods Duty Rate From 1st Jan 2015 until 31st Dec 2017 Duty Rate on and From 1st Jan 2018 Carcasses and half carcasses 10% Other cuts with bone in 10% Boneless 10% MEAT OF BOVINE ANIMALS, FROZEN. Carcasses and halfcarcasses 10% Other cuts with bone in 10% Boneless: Other 10% Carcasses and halfcarcasses 10% Hams, shoulders and cuts thereof, with bone in 10% Other 10% Carcasses and halfcarcasses 10% Hams, shoulders and cuts thereof with bone in 10% Other 10% Customs Tariff (2018 Budget)(Amendment) - 4 - Tariff Item Description of Goods Duty Rate From 1st Jan 2015 until 31st Dec 2017 Duty Rate on and From 1st Jan 2018 Not cut in pieces, fresh or chilled per kg.

4 Per kg. Not cut in pieces, frozen per kg. per kg Cuts and offal, fresh or chilled per kg. per kg Cuts and offal, frozen per kg. per kg other per kg. per kg. Not cut in pieces, fresh or chilled per kg. per kg. Not cut in pieces, frozen per kg. per kg. Cuts and offal, fresh or chilled per kg. per kg. Cuts and offal, frozen per kg. per kg. Mechanically separated, deboned or removed Free Free meat of a kind for use in manufacturing Other per kg. per kg. Not cut in pieces, fresh or chilled per kg. per kg. Not cut in pieces, frozen per kg. per kg. Fatty livers, fresh or chilled per kg. per kg. Other, fresh or chilled per kg. per kg. Other, frozen per kg. per kg. Not cut in pieces, fresh or chilled per kg. per kg. Not cut in pieces, frozen per kg.

5 Per kg. Fatty livers, fresh or chilled per kg. per kg. Other, fresh or chilled per kg. per kg. Other, frozen per kg. per kg. Of guinea fowls per kg. per kg. Of crocodiles 15% Hams, shoulders and cuts thereof, with bone in 15% Bellies (streaky) and cuts thereof 15% Bacon 15% Other 15% Beef, corned 15% Tongues 15% Other meat of bovine animals 15% 15% Of primates 15% Customs Tariff (2018 Budget)(Amendment) - 5 - Tariff Item Description of Goods Duty Rate From 1st Jan 2015 until 31st Dec 2017 Duty Rate on and From 1st Jan 2018 Of whales, dolphines and porpoises (mammals of the order Cetacea); of manatees and dugongs (mammals of the order Sirenia); of seals, sea lions and walruses (mammals of the suborder Pinnipedia) 15% 15% Of crocodiles 15% 15% Other 15% 15% Other 15% 15% Freshwater 15% 15% Other 15% 15% Trout (Salmo trutta, Oncorhynchus mykiss, Oncorhynchus clarki, Oncorhynchus aguabonita, Oncorhynchus gilae, Oncorhynchus apache and Oncorhynchus chrysogaster) 15% 15% Eels 15% 15% Carp (Cyprinus spp.)

6 , Carassius spp, Ctenopharyngodon idellus, Hypophthalmichthys spp., Cirrhinus spp., Mylopharynogodon piceus, Catla catla, Labeo spp., Osteochilus hasselti, Leptobarbus hoeveni, Megalobrama spp.) 15% 15% Atlantic and Pacific bluefin tunas (Thunnus thynnus, Thunnus orientalis) 15% 15% Southern bluefin tunas 15% 15% (Thunnus maccoyii) Other 15% 15% Trout 15% 15% Pacific salmon, (Oncorhynchus nerka, Oncorhynchus gorbuscha, Oncorhynchus keta, Oncorhynchus tschawytscha,Oncorhynchus kisutch, Oncorhynchusmasou and Oncorhynchus rhodurus) 15% 15% Atlantic salmon (Salmo salar) and Danube salmon (Hucho hucho) 15% 15% Other 15% 15% Halibut 15% 15% Plaice 15% 15% Sole 15% 15% Turbots (Psetta maxima) 15% 15% Other 15% 15% Albacore or longfinned tunas 15% 15% Yellowfin tunas 15% 15% Skipjack or stripebellied bonito 15% 15% Bigeye tunas (Thunnus obesus) 15% 15% Atlantic and Pacific bluefin tunas (Thunnus thyynnus, Thunnus orientalis) 15% 15% Southern bluefin tunas (Thusnnus maccoyii)

7 15% 15% Other 15% 15% Herrings (Clupea harengus, Clupea pallasii) 15% 15% Anchovies (Engraulis spp.) 15% 15% Sardines ( Sardina pilchardus, Sardinops spp.), sardinella (Sardinella spp.) brisling or sprats (Sprattus sprattus) 15% 15% Mackerel (Scromber scombrus, Scomber australasicus Scomber japonicus 15% 15% Jack and horse makerel (Trachurus spp.) 15% 15% Cobia (Rachycentron canadum) 15% 15% Swordfish (Xiphias gladius) 15% 15% Customs Tariff (2018 Budget)(Amendment) - 6 - Tariff Item Description of Goods Duty Rate From 1st Jan 2015 until 31st Dec 2017 Duty Rate on and From 1st Jan 2018 Other 15% 15% Cod ( Gadus morhua, Gadus ogac, Gadus macrocephalus) 15% 15% Haddock (Melanogrammus aeglefinus) 15% 15% Coalfish (Pollachius virens) 15% 15% Hake ( Merlucius spp, Urophycis spp) 15% 15% Alaska Pollack (Theragra chalcogramma) 15% 15% Blue whitings (Micromesistius poutassou, Micromesistius australis) 15% 15% Other 15% 15% Tilapias (Oreochromis spp.))

8 15% 15% Catfish (Pangasius spp.,Silurus spp, Clarias spp, Ictalurus spp.) 15% 15% Carp (Cyprinus spp.,Carassius spp., Ctenopharyngodon idellus, Hypophthalmichthys spp., Cirrhinus spp., Mylopharyngodon piceus, Catla catla, Labeo spp., Osteochilus hasselti, Leptobarbus hoeveni, Magalobrama spp.) 15% Eels (Anguilla spp.) 15% Other 15% Dogfish and other sharks 15% Rays and Skates ( Rajidae) 15% Tooth fish ( Dissostichus spp.) 15% 15% Seabass (Dicentrarchus spp.) 15% 15% Seabream (Sparidae) 15% 15% Barramundi 15% 15% Barracuda 15% 15% Barracouta 15% 15% Bait for fishing of heading ( ) 15% 15% Other 15% 15% Livers, roes and milt 15% 15% Shark fins 15% 15% Other 15% 15% Sockeye salmon (red salmon) (Oncorhynchus nerka) 15% 15% Other Pacific Salmon (Oncorhynchus gorbuschus, Oncorhynchus keta, Oncorhynchus tschawytscha, Oncorhynchus kisutch, Oncorhynchus masou, Oncorhynchus rhodurus) 15% 15% Atlantic salmon (Salmo salar) and Danube 15% 15% salmon (Hucho hucho) Trout (Salmon trutta, Oncorhynchus mykiss, Oncorhynchus clarki, Oncorhynchus aguabonita,Oncorhynchus gilae, Oncorhynchus apache, Oncorhynchus chrysogaster) 15% 15% Other 15% 15% Tilapias (Oreochromis spp.)

9 15% 15% Catfish (Pangasius spp.,Silurus spp, Clarias spp, Ictalurus spp.) 15% 15% Carp (Cyprinus spp., Carassius spp., Ctenopharyngodon idellus, Hypophthalmichthys spp., Cirrhinus spp., Mylopharyngodon piceus, Catla catla, Labeo spp., Osteochilus hasselti, Leptobarbus hoeveni, Megalobrama spp.) 15% 15% Eels (Anguilla spp.) 15% 15% Other 15% 15% Customs Tariff (2018 Budget)(Amendment) - 7 - Tariff Item Description of Goods Duty Rate From 1st Jan 2015 until 31st Dec 2017 Duty Rate on and From 1st Jan 2018 Halibut 15% 15% Plaice 15% 15% Sole 15% 15% Turbots (Psetta maxima) 15% 15% Other 15% 15% Other 15% 15% Other 15% 15% Other 15% 15% Other 15% 15% Atlantic and Pacific bluefin tunas (Thunnus thynnus,Thunnus orientalis) 15% 15% Southern bluefin tunas 15% 15% Other 15% 15% Herrings (Clupea harengus, Clupea pallasii) 15% 15% Sardines (Sardina pilchardus, Sardinops spp.)

10 , sardinella (Sardinella spp.) brisling or sprats (Sprattus sprattus) 15% 15% Mackerel (Scromber scombrus, Scomber australasicus Scomber japonicus) 15% 15% Jack and horse makerel (Trachurus spp.) 15% 15% Cobia (Rachycentron canadum) 15% 15% Swordfish (Xiphias gladius) 15% 15% Other 15% 15% Cod (Gadus morhua, Gadus ogac, Gadus macrocephalus) 15% 15% Haddock (Melanogrammus aeglefinus) 15% 15% Coalfish (Pollachius virens) 15% 15% Hake (Merlucius spp, Urophycis spp) 15% 15% Alaska Pollack (Theragra chalcogramma) 15% 15% Blue whitings (Micromesistius poutassou, Micromesistius australis) 15% 15% Other 15% 15% Other fish, excluding edible fish offal of subheadings to : Dogfish and other sharks 15% 15% Rays and Skates ( Rajidae) 15% 15% Tooth fish ( Dissostichus spp.) 15% 15% Seabass (Dicentrarchus spp.) 15% 15% Other Barramundi 15% 15% Barracuda 15% 15% Barracouta 15% 15% Other 15% 15% Livers, roes, milt, fish fins, heads, tails, maws and other edible fish offal 15% 15% Livers, roes and milt 15% 15% Shark fins 15% 15% Other 15% 15% Tilapias (Oreochromis spp.)