12 Mar 2007

Tonga's planned tax changes will be a boost to low income earners

5:49 pm on 12 March 2007

There is to be some assistance for low income earners in Tonga through proposed changes to the tax system.

Currently, people start paying tax if they earn more than 2,500 pa'anga or 1,200 U.S. dollars but this will be raised to 8,400 pa'anga or nearly 4,000 dollars if parliament agrees to the proposals.

The chairman of the chamber of commerce, Tapu Panuve, who took part in consultations on the changes, says it is only the highest income earners who have been targetted.

He says local and foreign-owned businesses will also benefit from the changes with the government attempting to kickstart the economy.

Mr Panuve says the government was keen to ensure that people on low incomes were not affected by the proposals.

"Now, of course, with the new threshold at 8,400, anyone earning up to that will not be taxed at all. It's a substantial number of people in that group, more in the manual, labour intensive type areas, handicrafts, clerical type work in different private sector companies, even in government, you have certain levels below the threshold."

The chairman of the chamber of commerce, Tapu Panuve.