JAKARTA - The World Bank Board approved a 150 million dollar financing package on December 15 to support Papua New Guinea's revenue reforms and disaster preparedness.

The approval comes as Papua New Guinea continues to struggle with low and unstable government revenue, despite earning billions of dollars from mining, oil, and gas exports.

Government revenue — particularly tax revenue — in Papua New Guinea has tended to be low relative to GDP, with tax collections around 15–16% of GDP in recent years. This has limited spending on health, education, and other basic services and left public finances vulnerable to swings in commodity prices.

A central part of the package is a new income tax law that introduces a capital gains tax and tightens tax reporting rules for foreign companies operating in the country. Changes to dividend rules for state-owned companies are also included, requiring them to pass more profits to the government.

Other measures cover biosecurity regulations and the development of an online system for trade paperwork.

The financing includes a $50 million emergency credit line that the government can draw on immediately after major disasters, such as cyclones or floods, to keep basic services running. It is the first time the Port Moresby government has used this type of financing.

World Bank Country Director Han Fraeters said the country has not been capturing enough value from its natural resources and that changes to the revenue system could help stabilise government finances.

The government will also put in place real-time health data systems and better search and rescue operations for when disasters hit.

Papua New Guinea, which neighbors Indonesia, is among the most disaster-prone countries in the Pacific, regularly hit by floods, landslides, earthquakes, and cyclones. In recent years, extreme weather has repeatedly damaged roads, health facilities, and food supplies, with floods and landslides in the Highlands displacing tens of thousands of people.

While the financing is not aimed at migration, development agencies have linked weak public finances and slow disaster response in Papua New Guinea to repeated displacement. More reliable revenue and faster access to emergency funds could help keep basic services and livelihoods running after disasters, reducing the risk that temporary displacement turns into longer-term mobility.

One of the most recent major disasters in Papua New Guinea was a massive landslide in Enga Province in May 2024 that buried villages. The United Nations estimated that around 670 people were dead or missing, with some local officials saying as many as 2,000 may have been buried.