Japan is a pioneer of automobile industry. Millions of vehicles are exported from Japan every year. Popularity of Japanese vehicles is confined not only to Japan, but across all parts of the country. The Japanese used vehicles are also exported to Papua New Guinea, which is in tropical Oceania, located in the western edge of the Pacific Ocean. The geography of Papua New Guinea includes the eastern half of the islands of New Guinea, the islands of New Ireland, New Britain and Bougainville, and smaller nearby islands. The country is the major importer of used vehicles from Japan as they are reliable, safe, durable and high on quality.
There is no specific restriction on age of used vehicles. This means that used vehicle of any age can be imported in Papua New Guinea. Quarantine requires all used vehicles imported to Papua New Guinea should be cleaned when arrives. Charges are to be paid by the importer for this service.
Documents for customs clearance:-
- Invoice showing the correct value, quantity, description, etc.
- Bill of Lading
- Customs Valuation Declaration
- Certificate of origin and value (if applicable)
- Import Permits/ Licenses/ Applications, etc (if prohibited/restricted)
Importer has to present any other documents that may be required by the Customs. At any time after the release of used vehicle, Customs reserve the right to examine the imported vehicle to determine the nature, origin, condition, quantity and value of the goods declared to Customs.
Customs duty and Import Excise duty free importation of used vehicles in Papua New Guinea is allowed provided the following conditions are met:
- The vehicle owner should reside in Papua New Guinea for a period of time exceeding a year, on or from their arrival date.
- The vehicle was for the whole period of over twelve months immediately preceding the owner’s departure for Papua New Guinea personally owned and used by the owner in the country in which the owner was living.
- Proof of ownership of the vehicle in a documentary form, such as registration certificate, invoice/ purchase receipt, insurance certificate and passport, etc. The documents can be produced to the Collector of Customs at the port of importation on demand.
- It is established on inspection that the vehicle has been used for a period of over twelve months and that it is roadworthy as per the safety standard and rules under Papua New Guinea’s road traffic rules.
If above conditions are not met, then the Customs duty and Import Excise duty that should be paid are decided as follows:
- The actual price paid plus value of any additional fittings and all charges paid or payable incurred in importing the vehicle including insurance and freight.
- The value established on the above basis will be subject to depreciation allowance of 5% for the first completed month of ownership and use overseas, less – further 1% for each subsequent month of ownership and use overseas, with a maximum reduction of 40% where a brand new vehicle was purchased from a dealer in the exporting country.
- The qualifying period for the depreciation allowance, for value for duty purposes, is to be taken as the period from the date of purchase to date of export to Papua New Guinea or, if sooner, the date of the owner’s embarkation for Papua New Guinea provided the vehicle was in the ownership and use of the owner for the whole of the period.
- If the evidences provided are not accurate due to discrepancy in value, thus are not accepted by the Collector of Customs. The vehicle could be seized for further investigation and proper estimation value.
Vehicles which do not qualify for concession on duty rate:-
- If the vehicle has been bought overseas as a used vehicle and is brought to PNG as a private or commercial import, then the vehicle is not eligible for duty free importation. Customs duty and Import Excise duty is payable after proof of valuation is established.
- If the person comes back to PNG after residing overseas for a period that is even less than a year and wish to import a vehicle purchased during their absence. It should be noted that Customs duty and Import Excise duty will be payable upon importation of the vehicle after proof of valuation is established.
Import tax Rates:-
Duties= (CIF value*import duty)*GST
For Personal Vehicles:-
- Vehicles with the engine size up to 2,700cc customs duty- 60% of CIF amount
- Vehicles with the engine size more than 2,701 cc customs duty-110% of CIF amount
For commercial vehicles:-
- With seating capacity over 10 seats import duty- 10%
- With seating capacity under 10 seats import duty-40%
Note: Goods and Services Tax (GST) is same for every vehicle (personal and commercial) imported, i.e. 10%.
Major ports for shipment of used vehicles in Papua New Guinea are Port Moresby, Lae, Alotau, Madang, Kimbe, Rabaul and Kavieng. The shipment of vehicles is done by RoRo (Roll-on Roll-off) shipment method, which is most common and reasonable shipment method. However, on special request of used vehicle importers, an expensive method called container shipment method is used.