TONGA TRIMS TAX ON IMPORTED GOODS

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NUKU΄ALOFA, Tonga (Radio Tonga News, Feb. 11, 2008) - All imported goods are no longer taxed more than 20 percent according to the new custom law.

According to Senior Officer of the Customs Department Kelemete Vahe, the custom 2007 regulation is in compliance with trade agreement with the World Trade Organisation.

Under the new categorization system imported goods that were usually charged above 20 percent will have to come under the new act with an exception to the capital goods.

In a televised program, Kelemete says that custom duty is no longer imposed on capital goods but excise tax. Goods that are taxed under this category apply to both imported and locally made products.

He gave example to beer products in which 40 pa’anga is taxed for the imported product while 20 pa’anga excise tax is charged on the local made beer.

Excise tax for imported alcohol is 40 pa’anga while 20 pa’anga is taxed on local made beverages.

He adds capital goods like vehicles are taxed according to the cylinder capacity (CC) adding that higher the CC the more consumers pay for the excise tax. Consumption tax is only applied to capital goods, according to Kelemete.

The charges range from one pa’anga to 2.50 per cylinder capacity.

Kelemete also said the system under the new custom law makes it easier to deliver their services effectively and efficiently.

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