Foreign Exchange Levy

His comment follow Monday’s announcement that Tonga will not host 2019 Pacific Games.

Pohiva said he decided to pull out of hosting the Games after he saw a World Bank report last week

The report said many countries, including in the Pacific, were left with under-utilised sporting facilities after hosting sporting events which rapidly deteriorated with under-use and lack of funding for maintenance.

The CEO for the Ministry of Finance and National Planning Tatafu Moeaki said consultation meetings with all the five banks and representatives of the ten licensed foreign exchange dealers since early 2015 had contributed to the enacted legislation and the Foreign Exchange Levy Regulation 2016 to ensure its implementation does not introduce foreign exchange restrictions, lower the levy amount, and lower administration costs by financial institutions.

The Minister for Finance and National Planning, ‘Aisake Eke says the proceeds from the levy is included in the 2016/17 budget and will assist Government finance its hosting responsibilities for the 2019 South Pacific Games as an important event for the Kingdom.

 The levy would be repealed at the end of Jun 2020 after the Games.

The Foreign Exchange Levy (Amendment) Act 2016 (Act No.4 of 2016) was granted Royal Assent by His Majesty’s Privy Council on the 28 April 2016 and will be gazetted to be effective from 1 June 2016.

The proposed levy which was set at 1 seniti per 1 pa'anga for every foreign exchange transaction was to help fund the 2019 Pacific Games.

The levy proposal sparked protests from the financial sector.

The one seniti levy has been deferred twice and was due to come into effect on Friday but has been put off again until next year.

The levy is to help pay for the 2019 Pacific Games which Tonga will host.