The president of Tonga's Chamber of Commerce, Tapu Panuve, says changes to the tax system will benefit people on lower incomes and overseas-based companies.
He was speaking after the Finance Minister, Siosuia 'Utoikamanu, said the Income Tax Act would simplify and rationalise tax rates.
The regulations stating the different tax rates will be declared at the end of the month.
Mr Panuve says the differing tax rates for business will now become a uniform 25 percent which helps out foreign-based companies.
"Their taxes will be dropped immediately from what was 43 percent to about 25 percent. For local companies, their taxes will go from 15 to 25 percent. But, I think there's a bit of give and take there."
Mr Panuve says individual income tax rates also change.
There's to be a significant increase to the minimum tax threshold from 2,500 pa'aga to 7,400 and the flat tax rate above that also changes.
Up to 30,000 pa'aga, it will be ten percent but any income above that, will be taxed at 20 percent.