11 Feb 2005

Tax to push up price of commonly-bought goods, says Tonga report

8:20 am on 11 February 2005

A report from Tonga says a new 15 per cent Consumption tax will come into force there, on the first of April.

Radio Tonga reports the new tax will replace the five per cent sales tax and the 20 per cent port and services tax.

The General Manager of the Tonga Co-operative Federation, Tevita Lavemaau, believes the the new tax system will see the prices of some goods drop by as much as eight per cent.

But he says the consumption tax is based on a user-pays system, which will see an increase in the costs of commonly-bought goods, such as food.

He says the new tax system will affect everyone, rich and poor.

Meanwhile, the Commissioner of Revenue, Sefita Tangi, says the consumption tax is aimed at solving the problem of high inflation in the kingdom.