If Tonga taxed all imported goods, it would not rely so heavily on overseas donors, says former CEO

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Ki he kau laukonga faka-Tonga, kiliki heni ke ke lau ai e kemipeini fili Fale Alea ‘a Kulufeinga ‘Anisi Bloomfield

If the government of Tonga taxed all its imported goods the kingdom would not have to rely heavily on overseas donors for its budgets, according to the former Ministry of Customs and Revenue CEO, Kulufienga ‘Anisi Bloomfield.

Only three percents of Tonga’s imported goods from overseas countries, including alcohol and tabacco were taxed, he said.

The tax-free policy was created to make these imported goods availble to Tongan customers at low prices, he said.

Bloomfield said  he made changes to the Tongan government’s free-tax policies and removed taxes from a number of important goods including electrical equipment, community initiatives for students such as buses imported from overseas and equipment for fisheries.

The government also removed taxes from foodstuffs which were identified as providing nutrition, educational equipment and materials, equipment for growing and farming, and also materials imported for local water supplies.

Poverty target

Bloomfield said the free tax policies had been part of the government’s move to alleviate poverty  after the Asian Development Bank reported in 2015 that 21.1 percent of the people of Tonga were living below poverty line.

That figure was a 1.9 percent drop from the ADB’s 2003 report  which showed that 23 percent of Tongans were living below poverty line.

He said he believed the government was indirectly reaching out to the poor in this way and helping by making goods available cheaply.

“The government spent millions on its tax-free policies and to me, if these imported goods had been taxed Tonga, would not have to borrow monies from overseas,” Bloomfield said.

Budget 2017 – 2018

However, the government charged taxes.

In its TP$595,804,400 budget for the year 2017 – 2018 the government said better paid Tongans would pay more taxes as part of the government’s move to make life easier for poorer Tongans.

It aimed at raising the buying power of lower income earners and generating more revenue from taxes.

The tax-free threshold on PAYE was also increased.

More than half of the budget comes from overseas grants.

New Zealand has donated $22.1 million in 2015 – 16 to Tonga, with most of the money spent on on energy systems, law and justice, education and tourism.

The main points

  • If the government of Tonga taxed all its imported goods the kingdom would not have to rely heavily on overseas donors for its budgets, according to the former Minister of Customs and Revenue CEO, ‘Anisi Bloomfield.
  • Only three percents of Tonga’s imported goods from overseas countries, including alcohol and tabacco were taxed, he said.
  • The tax-free policy was created to make these imported goods availble to Tongan customers at low prices, he said.
  • Bloomfield said he made changes to the Tongan government’s free-tax policies and removed taxes from a number of important goods including electrical equipment, community initiatives for students such as buses imported from overseas and equipment for fisheries.

For more information

Government hopes new budget will make lives better for poorest Tongans

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