Over $11 million pa'anga in unpaid tax and duties from 2004-14, owed to the Ministry of Revenue and Customs, is an issue that Tonga’s new government of Prime Minister Dr Pohiva Tu‘i‘onetoa wants to address.

A Press Statement from the Prime Minister’s office this week clarified why the $11 million unpaid tax and duties remained a matter of great concern for the now Prime Minister, who was the Minister of Finance under the previous government.

Hon. Tu‘i‘onetoa was not present when, on 12 July 2019, the fomer Cabinet agreed to write off debts of unpaid tax and duties of over $11m owed to the Ministry of Revenue and Customs for the period 2004-2014.

Cabinet in July was led by the late Prime Minister Hon. ‘Akilisi Pohiva with Hon. Mateni Tapueluelu as the Minister of Revenue and Customs.

However, on 17 July 2019 Cabinet decided to rescind its earlier decision of 12 July 2019 to write off the debts.

A statement issued by the PMO on 19 November, said that  “To be noted no debts has been written off.”

Not specified

The PMO did not reveal who the debtors were, but stated that debts were incurred during the period 2004-2014. It did not state whether or not the taxes included accrued penalties imposed. It did not explain why duties were unpaid, since most people cannot clear their goods without paying duties.

The statement said that Cabinet originally approved to write-off the debts on 12 July before revoking that decision because of unfulfilled protocols.

According to the PMO, the Ministry of Revenue and Customs did not submit proposed debt write-offs to the Ministry of Finance to investigate, a procedure required by the Public Finance Management Act.

“Traditionally, when a submission to write off debts is received by the Ministry of Finance, it referred them to the Auditor General’s Office to carry out the verifications of the reasons that these debts cannot be collected by the reporting agencies”, the PMO stated.

“The Auditor General reports back to the Minister Finance his findings and the Minister of Finance reports to Cabinet as to whether the debt is to be written off or not”, it added.

“On the same decision, the Cabinet directed the Minister of Revenue and Customs to submit the list of debts for tax and duties for 2004-2014 to the Ministry of Finance to conduct due process before submitting to Cabinet.

“At present, the Ministry of Finance has yet to receive any submission from the Ministry of Revenue and Customs for any unpaid debts to write off as required by law”, the PMO concluded.

The recently appointed Minister of Finance is Hon. Tevita Lavemaau, who is also the Minister of Revenue and Customs, is currently overseas.

When questioned by Matangi Tonga Online this week, no one in the Ministry knew anything relating to the proposal by the former Minister of Revenue and Customs, Hon. Mateni Tapueluelu to write off the debts.

To read the full PMO media release click on link: 20191119 PMO Media Release debts.pdf  [2]

or 20191119 Ongoongo Tukuatu 11miliona.pdf [3]