The two commercial banks representatives were adamant in their opposition to the levy, which parliament has passed at the end of June. However, the King in Council has sent back the Foreign Exchange Levy Bill to parliament for further revision.
The levy is understood to mean that if the bank makes five seniti from every dollar that it exchanges, government is going to take two seniti.
Initially, the scheme was that aid money from aid donors to government was excluded but because of a petition to the King in Privy Council over the levy, and the deference by the king of his consent to the Foreign Exchange Levy Bill 2015 ‘Aisake said that they decided to reduce the levy from two seniti to one seniti and that all foreign currency that comes into the country, including aid to government, will be subject to the levy.
The two commercial banks representatives, who insisted their opposition to the levy, even at one seniti, were asked: “How much would you prefer?”
“0.01 seniti,” said Dan Henson.
The discussion then started to question how much profit the banks are making from foreign currency exchange transactions. ‘Aisake moved for commercial banks representatives, Chamber of Commerce Executive and members of the Tonga Pacific Games Committee to meet.
The rest of members of the Chamber nodded their heads in approval, but at that stage a number of people had left the meeting, including Lord Sevele, Lord Tupou and Takitoa Taumoepeau from the national Pacific Games Committee and Dan Henson from the Bank of the South Pacific.
Meanwhile, in a statement on Monday 03 August the Prime Minister’s Office said government was fully aware of the challenge of raising finance to fund the preparation for the Games.
“The Government is doing its best to seek financial assistance from donor and development partners and raise revenue for the Games,” the Prime Minister stated.
The Government has received funds from the New Zealand Government towards Teufaiva Stadium and discussions are underway with other donor and development partners to fund other sporting complexes.”
“The Government is also currently finalizing the legal process for the implementation of the $100 pa’anga increase in Departure Tax and the 1 seniti levy that will be imposed as part of the spread of the Pa’anga value on every purchase and sale of foreign currency, which is a reduction by 1 seniti from the two seniti originally proposed in response to raised concerns during the consultation with key stakeholders. These are the two revenue streams that Government has approved to raise funds for the Games,” the PMO stated.