Analysis of Mechanisms for Sustainable Land Taxation in Lae City, Papua New Guinea

Jeffrey Petrus, Jacob A. Babarinde, Lepani Karigawa


Following severe criticisms against perceived inefficiency and unfairness of land taxation system in Papua New Guinea, this paper appraises four mechanisms used for land tax assessment and tax collection in the country. The mechanisms investigated as part of a larger study are validity of previous valuation roll, determination of unimproved land value, professional acceptability of the valuation methods used, and whether planning approval had been secured for the improvements on land. The study is based on a questionnaire survey of 150 respondents, including state land leaseholders and officials of the Lands Department at Lae Municipality and the City’s Internal Revenue Commission. The hypothesis tested yields a Chi-Square Test value of 8.872 and a Probability Value (P Value) of 0.75 (75%), which is statistically significant at 0.01 level. These findings indicate that the Lae City Municipality has 75% chances of becoming sustainable in the foreseeable future, particularly if the recommendations made are thoughtfully implemented.

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