Tonga's Cabinet has passed new regulations for the new Income Tax Act.
New customs and excise duty rates and regulations have also been introduced.
Under the new Income Tax Act, people in the lower income bracket would not have to pay tax.
The Prime Minister says the tax free income for lower income people used to be 2,500 paaga or 1,225 US dollars, the new minimum is 7,400 paaga or 3,626 US a year.
Dr Feleti Sevele says there would be no duty on fuel for domestic airlines.
The Matangi Tonga Online reports the higher incomes will pay more, and those above the 30,000 pa'aga or 14,700 US dollar salary will pay 20-percent,instead of the current 10-percent.
There is now an excise duty paid on the cc capacity of a vehicle, rather than a flat 45-percent duty per car.