1 Nov 2007

Niue government considers phased tax change

3:50 pm on 1 November 2007

The Niue Government is considering bringing in planned tax changes in two stages.

A year ago MPs agreed in principle to bring in a consumption tax, cut personal taxes, reduce import duties and to re-impose an excise duty on a limited number of items.

Don Wiseman has more details.

"Niue is changing its tax base because the present system doesn't generate enough while its commitment to the Pacific Agreement on Closer Economic Relations requires import duties to be progressively wiped. The Cabinet is now looking at phasing in the Niue Consumption Tax, or NCT, and the lower income taxes by the first of April next year. The proposal is also that the removal of import duties, and the imposition of excise tax on items such as tobacco and alcohol, be deferred until the following year or after an assessment of the revenue implications. The impact of the NCT, to be set at 12 point five percent, and the lower personal taxes, according to the draft Cabinet paper would be neutral for Government revenue, while just 18 people on the island would be worse off. The paper says most people would have more money in their hands to offset the higher price of goods."