This paper evaluates tax elasticities and the impact of discretionary tax measures on government revenue in Papua New Guinea (PNG) using a dynamic macroeconometric model of taxation which captures the interaction between GDP, individual tax systems and individual tax revenues and bases. Our findings show that economic growth and discretionary tax changes have both been effective in mobilizing additional tax revenue. However, the responsiveness of the individual tax system reflected base‐to‐GDP elasticity except personal income tax whose elasticity reflected increased tax ra