No new salary tax for workers in 2026, says tax office

Workers in the formal sector will not pay extra salary income tax in 2026, according to the Internal Revenue Commission [IRC].

In a media statement, the tax office clarified that there is no increase in personal income tax rates under the new Income Tax Act 2025, which comes into effect on January 1, 2026.

The IRC said the new law is focused on modernising the tax system, not reducing the take-home pay of ordinary Papua New Guineans.

The clarification follows concerns raised by employers and industry groups about how the new tax law will be applied.

Acting Commissioner General Sam Loi said the government has not increased personal income tax rates and that the changes will not affect the earnings of the average worker.

He said the same personal income tax system will continue into the new year, with no new deductions for public servants or the general workforce.

The IRC also clarified that only a small group of employees may see changes. This includes workers who are provided with company or government vehicles that are used for both work and private purposes.

The tax office stressed that this is not a new tax, but simply a clearer and more straightforward way of calculating an existing benefit.

The Income Tax Act 2025 was passed by Parliament in March and will take effect from January 1 next year.