The former Chief Executive of the Ministry of Customs and Revenue says Tonga would not have to rely on overseas donors for its budget if it imposed taxes on all imported goods.
Kulufeinga ‘Anisi Bloomfield says only three percent of Tonga’s imported goods including alcohol and tobacco are taxed.
The tax-free policy was created to make imported goods available to Tongan customers at low prices, he said.
Bloomfield said he made changes to the Tongan government’s free-tax policies and removed taxes from a number of important goods including electrical equipment, community initiatives for students such as buses imported from overseas and equipment for fisheries.
Kaniva News reports the government also removed taxes from foodstuffs which were identified as providing nutrition, educational equipment and materials, equipment for growing and farming, and also materials imported for local water supplies.
Bloomfield said the free tax policies had been part of the government’s move to alleviate poverty after the Asian Development Bank reported in 2015 that 21.1 percent of the people of Tonga were living below poverty line.
That figure was a 1.9 percent drop from the ADB’s 2003 report which showed that 23 percent of Tongans were living below poverty line.
He said he believed the government was indirectly reaching out to the poor in this way and helping by making goods available cheaply.
“The government spent millions on its tax-free policies and to me, if these imported goods had been taxed, Tonga would not have to borrow monies from overseas,” Bloomfield said.