King defers foreign exchange levy, new airport tax to start soon

Photo: Tatafu Moeaki Tonga’s Secretary for Finance. Photo/Tatafu Moeaki (Facebook)

Tonga’s large increase in its airport departure tax and the new charges on foreign exchange transfers set to start on July 1 have now been delayed.

The king’s Privy Council wanted government to act on a petition handed in by Tonga Chamber of Commerce against the foreign exchange charge.

The Office of the Attorney General is currently working to change the departure tax regulation so that government could be able to impose the additional tax charge.

Both tax charges were originally proposed by former government of Lord Tuʻivakanō in order to help Tonga host the 2019 Pacific Games.

The government budget 2015/16 which was passed in Parliament last month increased the departure tax by TP$100 to TP$165 while the new charges on foreign currency transfers were expected to collect an additional TP$2 million annually.

Tonga’s Finance Secretary Tatafu Moeaki told Kaniva News this afternoon the Office of the Attorney General is currently working on the amendment and the government would announce when it would take effect.

According to Moeaki as the current departure tax is already in place the only thing the government needs to do is to change the regulation to amend the amount charged.

But as the Foreign Exchange Levy Bill required new legislation it has had to end up at the Privy Council.

“HM Privy Council deferred the Foreign Exchange Levy Bill for Government to address petition from Tonga Chambers of Commerce (but not revoked) and now Government works to address it,” Moeaki said.

“The Departure Tax by the nature of the legal instrument did not require a new Bill (such as the Foreign Exchange Levy) because current departure tax is already in place but an amendment to the regulations to add the additional tax” he said.

“Therefore the Departure Tax Regulation Amendment did not have to be tabled in a Bill to Legislative Assembly and therefrom to the HM in Privy Council but only the Foreign Exchange Levy Bill”.

“The departure tax as proposed in the legislated 2015/16 budget were designed to be collected effective from 1st July 2015,” he said.

“The 2015/16 budget has been gazetted already whilst the regulation amendment to legalize its collection is yet to be approved and we are now working with the Office of the Attorney to finalize”.

Moeaki said the amendment will specify how the additional departure tax would be collected.

The new measures have caused considerable public outcry particularly amongst Tongans based overseas who believe they make up the majority of international travellers to the Kingdom.

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