Papua New Guinea will implement reforms to strengthen revenues, facilitate trade, create jobs, and improve community protection from disasters following the World Bank Board’s approval of a US$150 million budget support package. PNG’s economy relies heavily on mining, oil, and gas, while most citizens earn a living through agriculture and informal work. Low and unpredictable revenues have historically limited public investment in essential services and employment opportunities.
The World Bank support aims to help PNG secure stronger, more reliable returns from its resource wealth, open new opportunities for farmers and small businesses, and enhance systems that protect communities during disasters and health emergencies. Central to the reform program is the new Income Tax Bill, which introduces a capital gains tax and strengthens measures to ensure overseas companies accurately report and pay taxes on profits repatriated from PNG. This is complemented by a reinforced State-Owned Enterprise Dividend Policy to mandate higher and more consistent returns from SOEs to the government.
Han Fraeters, World Bank Country Director for Papua New Guinea, Solomon Islands, and Vanuatu, emphasized that the reforms can help PNG capture fair returns from its resource wealth and direct more resources to health, education, and job creation, thereby fostering a more stable and resilient economy. Additional measures, such as the Biosecurity Bill 2025 and the National Trade Portal, are designed to facilitate trade, ease exports, and support agribusiness growth.
The financing package includes a US$50 million Catastrophe Deferred Drawdown Option (Cat DDO) that the government can access immediately after a major disaster to maintain essential services and support affected communities, marking PNG’s first use of this disaster response mechanism. As part of this initiative, the government will strengthen national preparedness by establishing real-time health data systems and improving search-and-rescue coordination.
