The chairman of Tonga's chamber of commerce, Tapu Panuve, says proposed changes to the country's tax system should encourage businesses but at the same, help with poverty alleviation.
Mr Panuve, who took part in an independent income tax committee on the changes, says lower income earners now have a higher threshold before they have to start paying tax.
He says it is only the highest income earners who have to pay more, going from a ten percent tax to a flat rate of 20 percent.
Mr Panuve says proposals for the business community include a lowering of the corporate tax rate for both local and foreign-owned businesses on earnings over a set amount, and an ability to pay taxes throughout the year instead of in one lump sum.
"It should help encourage foreign-based businesses to come into the country. For local businesses, it should ease up their cash flow plus also it'll be easier for them to pay their taxes based on prior year's results. So, in a nutshell, it's all aimed at getting the economy going again."
Mr Panuve says the changes must be approved by parliament before they can be implemented.
