Stamp duty is one of the oldest taxes still on the PNG statute book, and one of the most misunderstood. It is not a tax on buying, selling or owning. It is a tax on documents — on the instrument that records a transaction.
A tax on instruments
Section 5 of the Stamp Duties Act (Chapter 117) imposes the duties set out in Schedule 1. Schedule 1 is a list of kinds of instrument, each with a rate beside it. If your document is on the list, duty is chargeable. If it is not, no duty is payable under this Act, however large the transaction.
That is why the practical question is never “how much is stamp duty on this deal?” but “which item of Schedule 1 does my document fall under?”
- Item 5 — conveyances or transfers on sale of real property. See buying a house.
- Item 9 — leases and agreements for leases of land and goods. See leases.
- Item 16 — transfers of marketable securities. See share transfers.
- Items 8 and 14 — deeds of gift and deeds of settlement. See gifts and estates.
- Item 16A — acquisitions of interests in landholding private corporations.
A lot of it has been abolished
Part VI of the Act removed several duties outright. Since 1 January 2008, duty no longer applies to mortgages and loan securities, bills of lading, certain credit transactions, company constitutions and memoranda of agreement. Since 1 April 2008, policies of insurance and the debits tax are gone as well.
Schedule 1 still prints those items, which is why outdated advice circulates. The abolishing sections are what govern. See which stamp duties have been abolished.
Who pays
Schedule 1 says, item by item, who bears the duty. The pattern is:
| Instrument | Duty payable by |
|---|---|
| Conveyance or transfer on sale of real property (item 5) | The purchaser, the person deemed to be the purchaser, or the person to whom the property is agreed to be conveyed |
| Lease or agreement for lease (item 9) | The parties, or any one or more of them |
| Transfer of marketable securities (item 16) | The purchaser, transferee or donee |
“The parties, or any one or more of them” matters. Where duty is expressed that way, the Collector can look to any party for the whole amount. A private agreement that the other side will pay does not bind the Collector — it only gives you a claim against that party.
The 60-day rule
This is the deadline that catches people. Under section 18(1A), a person liable in respect of a dutiable instrument must cause it to be duly stamped, or lodged with the Collector of Stamp Duties:
- where it was executed in Papua New Guinea — within 60 days after execution; or
- where it was executed outside PNG — within 60 days after its receipt in PNG, or 180 days after execution, whichever expires first.
Miss it and two things follow: an offence under section 18(1B), and penalty duty under section 18(2) that keeps growing. See what happens if you do not stamp a document.
Under section 19, an instrument that is not duly stamped shall not be pleaded or given in evidence (except in criminal proceedings) or admitted to be good, useful or available in law. If you ever need to enforce the agreement, an unstamped document is the first thing the other side will point at.
Documents signed overseas still count
Section 5A deals with instruments outside Papua New Guinea, and section 18(1A)(b)(ii) sets the timetable for them. Signing a document offshore does not take a PNG transaction outside the Act.
Who administers it
The Act is administered by the Collector of Stamp Duties (sections 3 and 4), within the Internal Revenue Commission. Section 4A imposes secrecy obligations on officers. The Collector assesses duty under section 20, and there are review, objection and appeal routes in sections 13A, 20A and 21 — see assessments, objections and appeals.
The consolidated text used for this series is the Act consolidated to No 14 of 2019, which carries a published warning that the Stamp Duties (Amendment) Act 2011 (No 19 of 2011) had not commenced as at October 2020 and is not consolidated into it. Rates and thresholds also change by amendment. Confirm the current position with the Internal Revenue Commission or a lawyer before acting.
Sources
- Stamp Duties Act (Chapter 117) — vLex
- Stamp Duties (Penalties Amendment) Act 2001 — PacLII
- Constitution of the Independent State of Papua New Guinea — PacLII
- PNG Consolidated Legislation — PacLII index
Section and Schedule references are to Chapter 117 as consolidated to No 14 of 2019.