20 Sep 2006

Niue opposition MP says low paid will be hurt by planned consumption tax

7:23 pm on 20 September 2006

An opposition MP on Niue says plans to bring in a consumption tax next year will hit low earners hard.

The Niue government is planning changes to its tax regime, with income tax rates being slashed for high and middle income earners, cuts to tariffs and a tax on goods and services to be called the Niue Consumption Tax, or NCT.

It is proposed, though yet to be approved by cabinet, that the NCT be set at 12.5 percent.

Opposition MP, Terry Coe, says low income earners and pensioners will find this very difficult.

"What they are saying is people who are paying tax will get a tax relief but these people are not paying anny tax so they are not going to get any relief at all and they are going to have to pay for these extra charges on duty and GST on goods and services."

Terry Coe.

The finance minister, Fisa Pihigia, says there are plans to increase the pensions to allow for the new tax.