Tonga suspends controversial FX Levy Act [1]
Saturday, November 21, 2015 - 20:24
Tonga’s controversial Foreign Exchange Levy Act 2015 has been suspended, according to Press Statement released by the Ministry of Finance and National Planning yesterday, 20 November.
There was no set date stated for when the Levy Act will be implemented, other than “later in early 2016.”
Meanwhile, the CEO for the Ministry of Finance and National Planning, Tatafu Moeaki said that government is in the process of “finalizing Regulations and supervisory measures that will be effective for both financial institutions and Government.”
It is anticipated that a new Regulation will be introduced in February 2016.
The Foreign Exchange Levy Act has had a bumpy ride since it was first enacted on 15 October 2015.
Initially, it was going to come into force on 21 October, then it was deferred to 3 November.
The proposed levy is an attempt by government to raise funds to enable Tonga to host the 2019 Pacific Games. It is estimated that Tonga needs $80 million pa’anga to host the games.
The proposed levy “of one seniti imposed as part of the spread of the pa’anga value of every purchase and sale of foreign currency” is the plan that government has put forward to help finance the 2019 Pacific Games.
Aid donors, New Zealand and China have also provide financial assistance, but specifically for the construction of sports facilities. New Zealand has donated NZD$2 million for the refurbishing of the Teufaiva Stadium, and China yesterday, 20 November approved a 120 million Yuan grant for two development projects, an Agriculture Technical Cooperation project and the Tonga Sports Gymnasium project.