A member of the Niue Assembly is warning that a new tax aimed at increasing government revenue could backfire.
A tax package that includes a 12.5 percent goods and services charge will go before parliament again in early December.
The passage of the Niue Consumption Tax bill was deferred following strong opposition from MPs at its last reading a year ago.
Niue's premier says the tax reforms, which include reducing income tax and removing the duty from imported goods, bring Niue into line with what other countries have done.
But Terry Coe fears the tax will drive people away from Niue.
"If our population drops down especially during the Christmas period which is an ideal time for people to leave then we're not going to have the people here to buy the goods and so they're not going to be able to collect the GST. So everything is gonna gradually just go down, down, down and the businesses, a lot of businesses, will just close up."
Terry Coe of the Niue Assembly.