First, Warning on “Hidden” Costs
Before you get excited about an overseas price, you must understand that duties, taxes, and fees can double the original purchase price. Please be aware of all the costs associated with purchasing and importing a vehicle from overseas before you make you purchase
30-Day Deadline Warning
If your imported vehicle is left uncleared at a Customs wharf for over 30 days, it will be forfeited to the State to recover costs. Timely action is critical.
The Step-by-Step Import Process
Step 1: Before You Buy – Do Your Homework
- Research and sum up all potential costs.
- Verify that your chosen vehicle model is not a prohibited import.
- Identify and engage a licensed Customs Broker—they are legally required to act on your behalf.
Step 2: The Customs Declaration (The Key Document)
- Your broker will prepare and lodge the Import Declaration (or SAD).
- This is a legal document. It must be accurate and include:
- Your full name, address, and Tax Identification Number (TIN)
- Correct description, quantity, value, and origin of the vehicle.
WARNING: False declarations can lead to goods being seized and may result in prosecution.
Step 3: Classification & Duty Assessment
- Customs will classify your vehicle using a Tariff Code and a detailed Tariff Specification Code (TSC).
- The TSC List (like the one provided for Toyota/Nissan models) is used to ensure the exact model, engine size, and year are correctly declared. This determines your duty rate.
Step 4: Pay Duties and Taxes
This is where the major costs are finalized and must be paid to clear the vehicle.
Step 5: Final Clearance & Getting on the Road
After payment, you must handle other agency requirements:
- Quarantine inspection and clearance.
- Safety Inspection and sticker.
- Motor Vehicle Insurance Limited (MVIL) registration.
Understanding the Costs – A Breakdown
This table uses the example of a 2.0L Subaru Forester from the provided document, with a purchase price of USD 6,000.00. It breaks down every calculation to show you exactly how the final total is reached. (Note: This is an example. Your costs will vary based on your vehicle’s value, engine size, and freight costs.)
| Cost Item | Calculation from Example (in PGK) | Final Amount (PGK) | Key Details |
|---|---|---|---|
| 1. Vehicle Purchase Price | USD 6,000.00 | The price you pay the overseas seller. | |
| 2. Freight & Insurance | Freight: USD 3,500.00 + Insurance: USD 270.00 = USD 3,770.00 | The cost to ship and insure the vehicle to PNG. | |
| 3. CIF Value (in USD) | (1) + (2) = USD 6,000.00 + USD 3,770.00 = USD 9,770.00 | Cost, Insurance, Freight – This is the base value for calculating taxes. | |
| 4. CIF Value (in PGK) | (3) × Exchange Rate (USD 1 = PGK 0.28) USD 9,770.00 ÷ 0.28 = PGK 34,892.85 | K34,892.85 | The value converted to Papua New Guinea Kina. |
| 5. Import Excise Duty | (4) × Duty Rate (20% for this 2.0L engine) PGK 34,892.85 × 20% = PGK 6,978.57 | K6,978.57 | Rate is 20% – 120% of CIF (PGK), depending on engine size. |
| 6. Value for GST | (4) + (5) = PGK 34,892.85 + PGK 6,978.57 = PGK 41,871.42 | CIF Value + Excise Duty. | |
| 7. Import GST (10%) | (6) × 10% PGK 41,871.42 × 10% = PGK 4,187.14 | K4,187.14 | GST is charged on the total of CIF value and the Excise Duty. |
| 8. Customs Entry Fee | Fixed fee as per declaration. | K30.00 | A processing fee for lodging the import declaration. |
| 9. Total Taxes & Customs | (5) + (7) + (8) = PGK 6,978.57 + PGK 4,187.14 + PGK 30.00 = PGK 11,195.71 | K11,195.71 | This is the total payable to Customs to release the vehicle. |
| 10. Other Clearance & On-Road Fees | Brokerage (K1,000) + Quarantine (K187) + Wharf Handling (K1,600) + Safety Sticker (K60) + MVIL Registration (K600) = PGK 3,447.00 | K3,447.00 | Mandatory fees paid to other agencies and service providers. |
| ✅ TOTAL COST TO IMPORT & REGISTER | (4) + (9) + (10) = PGK 34,892.85 + PGK 11,195.71 + PGK 3,447.00 = PGK 49,535.56 | K49,535.56 | This is the complete, all-inclusive cost. |
Key Takeaway from the Example: The original vehicle cost of USD 6,000 (approx. K21,000) grew to a final cost of K49,535.56. The taxes, duties, and essential fees (K14,642.71) and freight/insurance (K13,892.85) added significantly more than the car’s purchase price.