The private sector in Tonga has welcomed the news that business tax will be paid on a provisional basis rather than in one lump sum.
The president of the Chamber of Commerce, Tapu Panuve, says this will make it easier on the cash flow of buinesses.
The move is part of wide ranging changes in the Income Tax Act just passed by parliament.
Mr Panuve also says the business tax rate will now be the same, whether for local or foreign-based companies which could attract overseas investment.
He says the changes should assist the private sector.
"The taxes for companies will be provisional tax, based on prior year's performance and they will allow companies to pay it on a quarterly or bi-monthly basis as opposed to one lump sum that they used to do in prior years. So, in terms of its effect on cash flow, it should be a lot easier so from that aspect it'll be welcome from companies."
Other changes include a rise in the minimum tax threshold from 2,500 pa'aga to 7,400 and above that, the introduction of two rates to replace the current flat rate of ten percent.
