US$150 million in budget support to strengthen revenue systems, improve services, and bolster nationwide disaster preparedness
PORT MORESBY, December 15, 2025 -Papua New Guinea will advance reforms to strengthen revenues, facilitate trade, grow jobs, and better protect communities from disasters following the World Bank Board's approval of a new US$150 million budget support.
PNG's economy is driven by mining, oil, and gas, but most people earn a living through agriculture and informal work. For years, low and unpredictable revenues have constrained public investment in essential services and jobs.
The new 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 strengthening systems that protect communities during disasters and health emergencies.
At the center of the reform program is the new Income Tax Bill, which introduces a capital gains tax and strengthens measures to ensure overseas companies appropriately report and pay tax on profits taken out of the country. This is complemented by a reinforced State-Owned Enterprise Dividend Policy to mandate higher and more consistent returns from SOEs to the government.
"PNG has not been getting the returns it should from its immense resource wealth. These reforms can help to change that," said Han Fraeters, World Bank Country Director for Papua New Guinea, Solomon Islands, and Vanuatu. "By strengthening revenue systems and directing more resources to health, education, and jobs, Papua New Guinea can build a more stable and more resilient economy. It will now be critical that PNG moves to implementing these newly adopted reforms."
Additional measures, such as the Biosecurity Bill 2025 and the National Trade Portal, are designed to facilitate trade, ease exporting, and support agribusiness growth.
The new World Bank financing also includes a US$50 million tranche that the government can immediately access after a major disaster to maintain essential services and support affected communities. Known as a Catastrophe Deferred Drawdown Option (Cat DDO), this is the first time PNG has used this mechanism for immediate disaster assistance.
As part of this disaster financing, the government will strengthen national preparedness by establishing real-time health data systems and enhancing search-and-rescue coordination.
