7 Mar 2005

Tonga Government expects big benefits from new consumption tax

8:27 pm on 7 March 2005

The Tonga government says its new consumption tax, due to come into force at the beginning of April, will be a big boost for the economy.

Tony Fakahau, from the Commissioner of Revenue's office, says it is the first stage in a series of tax reforms.

He says the tax is designed to be fairer, more efficient and better administered, which he says will have three key benefits.

"firstly it promotes economic development by encouraging best business practice; secondly it removes both domestic and foreign barriers to trade and thirdly it encourages efficiencies within businesses."

Tony Fakahau says the changes will help Tonga to perform on an equal footing in Pacific trade.

He says it will make imports cheaper because of the removed of excise tax while exporters will benefit because they will not have to pay the consumption tax.