Tonga's tourist industry hit hard by Severe Tropical Cyclone Harold and CoViD-19 lockdowns this month will soon be allowed new duty free and CT free imports of building materials, along with other incentives, while all businesses are allowed an extension of time for filing some tax returns, Tonga's Revenue and Customs Services told the Tonga Chamber of Commerce and Industries yesterday.

Tonga's Revenue Services have already introduced a three months extension of time without penalties for all businesses to file some of their returns.

Tax and Customs officers explained the measures at a Special Taxation Forum on CoViD-19 for the TCCI yesterday.

Many businesses were experiencing difficulties during the CoViD-19 lockdowns and travel restrictions, before TC Harold came along and destroyed many coastal tourism properties.

Taniela Sila, SADCEO for the Ministry of Revenue and Customs said that all businesses were allowed until 30 June to file their Consumption Tax returns and payments for the months of March, April and May. These were usually due before the 27th of each month. The extension of time does not apply to PAYE returns, but to all other returns, including End of Year returns.

“There will be no penalties for three months until June 30 – but after that if you are late the penalties will be backdated.”

He said there could be no handouts for business recoveries but the tax extensions and tariff exemptions and incentives were introduced to help.

“It's like a panadol.”

Fishing companies

Other policy measures that have been introduced include zero rated CT for five registered fishing companies.

He also said that cyclone damage to business properties has to be assessed and recorded with Inland Revenue, where businesses were not operating or seeking more time to pay taxes.

“If your company is not operating you have to let us know.

“Revenue Services are trying to take a case by case approach, so come and talk to us if you are finding it difficult, we can give it some time,” he urged business owners.

Submissions were made to Cabinet for a wide range of CoViD-19 specific measures and a few modified tariffs were already approved to assist with infrastructure development. These included:

• Gazettes 13, 14, and 15 of 27 March 2020 allow exemptions of duty and CT for the import of medical supplies and Personal Protective Equipment. There is no time limit.
• Gazettes 16 and 17 of 6 April 2020 (Customs Tax Act) allow all imports of food and personal hygiene products (not commercial) free of Duty and CT from 6 April until 30 June 2020.
• Gazette 21 of 7 April allows the import of certain building materials for private dwellings, education buildings and community buildings to be exempt from Duty and CT from 7 April until 31 December 2020.
• Gazette 18 & 19 allow Excise and CT exemptions on fuel imports. Village schemes exempt for the first 400 lt per month, and aviation fuel imported for domestic air transport.

Further incentives are expected to be Gazetted soon. These include tariff exemptions for the import of heavy machinery parts for road construction.

There will also be an extension of the threshold for tourism incentives, with duty free and CT imports for specified businesses to be increased from CIF$100,000 to CIF$500,000. Businesses who previously claimed import exemptions under TC Gita in 2018, can start afresh, with up to $500,000 duty free.

However, “These incentives need to be signed by the minister before they are Gazetted and become effective.”

The CEO of Revenue & Customs, Kelemete Vahe and the Head of Customs, Michael Tokangasinga, answered questions.

Kelemete said there was no cancellation of tax but just a deferment of payments until June 30.

Cyclone damage

Kelemete urged businesses to clear their containers from the Queen Salote Wharf.

“Goods were damaged by Cyclone Harold. A total of 33 vehicles and 54 containers were damaged,” he said.

Some containers were broken and need to be assessed. “Come forward and try to clear them, the sooner the better,” said Kelemete.

- By Mary Lyn Fonua