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Letters

Levy seems like a huge tax

Nuku'alofa, Tonga

From the calculations shown, the Levy should be called a 1 cent levy and not 1%, ref. 1% foreign exchange levy deferred “a few weeks”.

The levy as shown is T$0.01 for every unit of foreign currency bought or sold. With the current exchange rate “surcharges” of the banks on a NZD, this levy would reduce their margin on foreign exchange transactions by 60%. I am not a great friend of the banks but this seems like a huge tax so one would expect that the banks would simply reduce the TOP paid out or increase the TOP to be paid by 1c for every unit of foreign currency received or paid out.

Exchanging NZ100 to TOP would give the person TOP142 with the levy and TOP143 without the levy. Buying NZ100 would cost TOP153 with the levy and TOP152 without the levy. Without going into details, because of duty and CT, NZ100 goods that originally cost TOP201 would cost TOP202.34 with the levy.

So one could say that the levy would increase the cost of living by .75%.

- Peter Goldstern