Tonga Government Continues To Collect Taxes For Pacific Games It Will Not Host

Foreign exchange levy, departure tax put in place to raise revenue for games

By Pesi Fonua

NUKU‘ALOFA, Tonga (Matangi Tonga, Aug. 8, 2017) – After some fiery exchanges in the House today, the Speaker called for Tonga's parliament to close until Monday August 14, giving government time to address concerns over their allegedly illegal collection of revenues from a levy and tax that was intended to raise funds for the Pacific Games.

The House was told that the Tonga government is continuing to collect revenues from the Levy on Foreign Exchange, and a Departure Tax on the airfares of people leaving the country.

The Pacific Games 2019 Taxation Incentives Act 2017 is still in place but Tonga has withdrawn from hosting the games.

[PIR editor's note: On Aug. 9, 2017 RNZI reported that 'Prime Minister Tuilaepa Sailele Malielegaoi says he is "99 percent confident" Samoa will be awarded hosting rights for the 2019 Pacific Games.']

Lord Vaea initiated the debate by suggesting that since government was still collecting revenues from incentives made to finance Tonga’s hosting of the 2019 Pacific Games, they should make the funds available for the people to borrow from.

The Minister of Justice, Hon. Vuna Fa'otusia reminded the House that there have been no changes to the National budget.  The revenue collected is still for sports, for the development of sports.

Illegal

The former Minister of Finance, Tongatapu People’s Representative No. 5, ‘Aisake Eke told the Minister that what they are doing is illegal.

(The Minister was told to resign by the Prime Minister, Hon. ‘Akilisi Pohiva on Sunday, 5 March 2017 after he abstained from voting on a defeated motion for a Vote of no Confidence on the Prime Minister and his Cabinet at the end of February.)

As Minister of Finance ‘Aisake Eke was responsible for the drafting of the 2017-2018 National Budget which was aligned with legislation to collect revenue for Tonga's hosting of the 2019 Pacific Games. The legislation included the Foreign Exchange Levy Act 2015, the Departure Tax, and the Pacific Games 2019 Taxation Incentives Act 2017.

When parliament passed the 2017-2018 National Budget in the early morning hours of 29 June, it first repealed the Pacific Games Organisation Act 2013. But it did not repeal the revenue collecting legislation that went with it.

Biggest budget

The 2017-2018 National Budget was Tonga’s biggest budget of more than $590 million pa'anga [US$269 million] included those revenue raising measures.

Members who are convinced that government is illegally continuing to collect revenue for the Pacific Games included, ‘Aisake Eke, Lord Tu'ilakepa, Lord Nuku, Samiu Vaipulu and Lord Tu'i'afitu.

Members who voiced their conviction that there was nothing wrong with government collecting revenue with the Levy, Departure Tax and the Pacific Games 2019 Taxation Incentives Act were the Prime Minister, the Minister of Justice and the Deputy Prime Minister.

Admission

However, the Minister of Police, Hon. Mateni Tapueluelu admitted that Cabinet has approved repeal of the legislations to collect revenue for the 2019 Pacific Games, but there was a delay in the drafting of the Bills, and tabling them into Parliament.

The Minister of Justice, Hon. Vuna Fa'otusia, on the other hand, insisted that there was nothing wrong with the collecting of revenue, which he said is for the “improvement of sports.” He insisted that collecting the revenue is legal. How they were going to spend the money was a decision that had to be approved by the House.

Lord Nuku, moved for the issue to be tabled with the Ombudsman.

The Speaker explained that the Ombudsman cannot look into Cabinet decisions.

The Prime Minister said that he would seek the advice of the Solicitor General.

The House closed until Monday, 14 July.

Matangi Tonga Magazine
Copyright © 2017 Matangi Tonga. All Rights Reserved

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